It is generally accepted that low levels of LPS-binding protein (LBP) augment the cell's response to LPS, while high levels of LBP have been shown to inhibit cell responses to LPS. Clinical studies and in vitro work by our group has demonstrated that in the setting of liver disease, increased or acute phase levels of LBP may actually potentiate rather than inhibit an overwhelming pro-inflammatory response. Therefore, in the present studies we sought to determine the role of acute phase LBP in mediating morbidity and mortality in animals challenged with LPS in the setting of biliary obstruction. Using LBP-deficient (LBPKO) mice and LBP blockade in wild-type mice, we demonstrate that high levels of LBP are deleterious in the setting of cholestasis. Following biliary obstruction and intra-peritoneal LPS challenge, hepatic injury, hepatic neutrophil infiltration, and mortality were significantly increased in animals with an intact LBP acute phase response. Kupffer cell responses from these animals demonstrated a significant increase in several inflammatory mediators, and Kupffer cell-associated LBP appears to be responsible for these differences, at least in part. Our results indicate that the role of LBP signaling in inflammatory conditions is complex and heterogeneous, and elevated levels of LBP are not always protective. Increased LBP production in the setting of cholestatic liver disease appears to be deleterious, and may represent a potential therapeutic target for preventing overwhelming inflammatory responses to LPS in this setting.