Lipopolysaccharide (LPS) from Gram-negative bacteria is one of the most potent innate immune-activating stimuli known. Here we review the current understanding of LPS effects on human monocyte and macrophage function. We provide an overview of LPS signal transduction with attention given to receptor cooperativity and species differences in LPS responses, as well as the role of tyrosine phosphorylation and lysine acetylation in signalling. We also review LPS-regulated transcription, with emphasis on chromatin remodeling and primary versus secondary transcriptional control mechanisms. Finally, we review the regulation and function of LPS-inducible cytokines produced by human monocytes and macrophages including TNFα, the IL-1 family, IL-6, IL-8, the IL-10 family, the IL-12 family, IL-15 and TGFβ.