Thrombomodulin (TM), a widely expressing glycoprotein originally identified in vascular endothelium, is an important cofactor in the protein C anticoagulant system. TM appears to exhibit anti-inflammatory ability through both protein C-dependent and -independent pathways. We presently have demonstrated that recombinant N-terminal lectinlike domain of TM (rTMD1) functions as a protective agent against sepsis caused by Gram-negative bacterial infections. rTMD1 caused agglutination of Escherichia coli and Klebsiella pneumoniae and enhanced the macrophage phagocytosis of these Gram-negative bacteria. Moreover, rTMD1 bound to the Klebsiella pneumoniae and lipopolysaccharide (LPS) by specifically interacting with Lewis Y antigen. rTMD1 inhibited LPS-induced inflammatory mediator production via interference with CD14 and LPS binding. Furthermore, rTMD1 modulated LPS-induced mitogen-activated protein kinase and nuclear factor-kappaB signaling pathway activations and inducible nitric oxide synthase expression in macrophages. Administration of rTMD1 protected the host by suppressing inflammatory responses induced by LPS and Gram-negative bacteria, and enhanced LPS and bacterial clearance in sepsis. Thus, rTMD1 can be used to defend against bacterial infection and inhibit LPS-induced inflammatory responses, suggesting that rTMD1 may be valuable in the treatment of severe inflammation in sepsis, especially in Gram-negative bacterial infections.