CD14 is a pattern recognition receptor involved in the interaction with multiple ligands, including LPS from gram-negative bacteria and lipoarabinomannan (LAM) from mycobacteria. While the interactions between LPS and soluble CD14 (sCD14) have been analyzed in detail, LAM/CD14 interactions remain uncharacterized due to the lack of suitable functional assays. We describe herein a novel bioassay for the analysis of CD14/ligand interactions. CD14-negative myeloid HL-60 cells up-regulate endogenous CD14 gene expression when stimulated with LPS in the presence of recombinant soluble CD14(1-348). Using the HL-60 bioassay, we showed that sCD14(1-348) confers responsiveness not only to LPS, but also to LAM. The response to LAM, but not that to LPS, was highly dependent on LPS binding protein (LBP). The N-terminal half of CD14 was sufficient to mediate HL-60 responses to LAM, since HL-60 cells responded with similar efficiency when stimulated with LAM and LBP in the presence of sCD14(1-348) or sCD14(1-152). Thus, the N-terminal 152 amino acids of CD14 contain the site(s) involved in the interaction with LAM and LBP, as well as the residues required for LAM-dependent CD14 signaling.