Previous studies have shown that cyclic peptides corresponding to residues 35 to 52 of the Limulus antilipopolysaccharide (anti-LPS) factor (LALF) bind and neutralize LPS-mediated in vitro and in vivo activities. Therapeutic approaches based on agents which bind and neutralize LPS activities are particularly attractive because these substances directly block the primary stimulus for the entire proinflammatory cytokine cascade. Here we describe new activities of the LALF31–52 peptide, other than its LPS binding ability. Surprisingly, supernatants from human mononuclear cells stimulated with the LALF peptide are able to induce in vitro antiviral effects on the Hep-2 cell line mediated by gamma interferon (IFN-γ) and IFN-α. Analysis of the effect of LALF31–52 on tumor necrosis factor (TNF) and nitric oxide (NO) production by LPS-stimulated peritoneal macrophages revealed that a pretreatment with the peptide decreased LPS-induced TNF production but did not affect NO generation. This indicates that the LALF peptide modifies the LPS-induced response. In a model in mice with peritoneal fulminating sepsis, LALF31–52 protected the mice when administered prophylactically, and this effect is related to reduced systemic TNF-α levels. This study demonstrates, for the first time, the anti-inflammatory properties of the LALF-derived peptide. These properties widen the spectrum of the therapeutic potential for this LALF-derived peptide and the molecules derived from it. These agents may be useful in the prophylaxis and therapy of viral and bacterial infectious diseases, as well as for septic shock.