Endotoxin is part of the outer membrane of the cell wall of Gram-negative bacteria. It refers to the lipopolysaccharide (LPS) complex associated with the outer membrane of Gram-negative bacteria. LPS is also called endotoxin, owing to its historical discovery. In the 1800s it became understood that bacteria could secrete toxins into their environment, which became broadly known as "exotoxin". The term endotoxin comes from the discovery that portions of Gram-negative bacteria itself can cause toxicity, hence the name endotoxin. Studies of endotoxin over the next 50 years revealed the actual molecule that produced the effects of "endotoxin" was in fact lipopolysacchride.

LPS has been demonstrated to bind to Toll-like receptor-4 of several immune system cells (including macrophages and dendritic cells), triggering the signalling cascade for macrophage/endothelial cells to secrete pro-inflammatory cytokines.

Endotoxins are frequent contaminants in plasmid DNA prepared from bacteria, and must be removed from the DNA to avoid unwanted inflammatory responses prior to in vivo applications such as gene therapy.