The Kupffer cell-hepatocyte interaction in the process of endotoxin clearance and the effect of alcohol on it were investigated in a newly developed rat Kupffer cell-hepatocyte culture system. The hepatic production of endotoxin binding protein was increased when the Kupffer cells were preincubated in the medium containing ethanol, and the resultant culture supernatant was added to the hepatocyte culture system. The amount of endotoxin binding protein produced by the hepatocytes was increased as the ethanol concentration in the culture medium of Kupffer cells was increased. This endotoxin binding protein was proved to enhance the uptake of endotoxin and suppressed the production of tumor necrosis factor in the Kupffer cells. When Kupffer cells and hepatocytes were isolated from chronically alcohol-fed rats, further addition of ethanol to the culture medium of Kupffer cells did not affect the hepatic production of endotoxin binding protein. The increase in hepatic production of endotoxin binding protein may serve as a defence mechanism against endotoxicity. There is a possibility that an impairment of the defence mechanism has a pivotal role in the development of endotoxemia and endotoxicity in chronic alcoholics.