Bacterial LPS is a potent agonist for priming and stimulating neutrophils (PMN). Although much has recently been learned about the binding receptors for LPS on these and other cells, little is known about the subsequent fate of LPS that has bound to the cell surface. In these studies, we evaluated three events in the interaction of Escherichia coli [3H]LPS with human PMN: 1) binding to the plasma membrane; 2) translocation to an intracellular compartment; and 3) enzymatic deacylation. Our results suggest that PMN bind LPS by at least two mechanisms: when serum is present, LPS binds almost entirely to CD14, whereas in the absence of serum, other binding mechanisms predominate. Serum thus augments CD14-mediated LPS binding, although the total amount of cell-associated LPS increases only by a factor of two, on average, when serum is added. Binding outpaces intracellular movement of the LPS, yet at least 1%/min of the cell-associated LPS is translocated to an intracellular compartment. In the absence of serum, LPS internalization occurs in the presence of a mAb that blocks LPS-CD14 binding, suggesting that an interaction with CD14 is not essential for LPS to traffic beyond the plasma membrane. LPS deacylation, which occurs over several hours, is inhibited by agents that reduce lysosomal (endosomal) acidification. This finding is consistent with a deacylating role for acyloxyacyl hydrolase, which has an acid pH optimum, and suggests that LPS moves at least transiently into an acidic intracellular compartment. These experiments provide a new temporal framework for evaluating LPS-neutrophil interactions.