MD-1 and MD-2 are secretory glycoproteins that exist on the cell surface in complexes with transmembrane proteins. MD-1 is anchored by radioprotective 105 (RP105), and MD-2 is associated with TLR4. In vivo studies revealed that MD-1 and MD-2 have roles in responses to LPS. Although the direct binding function of MD-2 to LPS has been observed, the physiological function of MD-1 remains unknown. In this study, we compared the LPS-binding functions of MD-1 and MD-2. LPS binding to cell surface complexes was detected for cells transfected with TLR4/MD-2. In contrast, binding was not observed for RP105/MD-1-transfected cells. When rMD-2 protein was expressed in Escherichia coli, it was purified in complexes containing LPS. In contrast, preparations of MD-1 did not contain LPS. When rMD-2 protein was prepared in a mutant strain lacking the lpxM gene, LPS binding disappeared. Therefore, the secondary myristoyl chain attached to the (R)-3-hydroxymyristoyl chain added by LpxM is required for LPS recognition by MD-2, under these conditions. An amphipathic cluster composed of basic and hydrophobic residues in MD-2 has been suggested to be the LPS-binding site. We specifically focused on two Phe residues (119 and 121), which can associate with fatty acids. A mutation at Phe(191) or Phe(121) strongly reduced binding activity, and a double mutation at these residues prevented any binding from occurring. The Phe residues are present in MD-2 and absent in MD-1. Therefore, the LPS recognition mechanism by RP105/MD-1 is distinct from that of TLR4/MD-2.