3-deoxy-D-manno-octulosonic acid-lipid A (Kdo2-lipid A) is the essential component of lipopolysaccharide in most Gram-negative bacteria and the minimal structural component to sustain bacterial viability. It serves as the active component of lipopolysaccharide to stimulate potent host immune responses through the complex of Toll-like-receptor 4 (TLR4) and myeloid differentiation protein 2. The entire biosynthetic pathway of Escherichia coli Kdo2-lipid A has been elucidated and the nine enzymes of the pathway are shared by most Gram-negative bacteria, indicating conserved Kdo2-lipid A structure across different species. Yet many bacteria can modify the structure of their Kdo2-lipid A which serves as a strategy to modulate bacterial virulence and adapt to different growth environments as well as to avoid recognition by the mammalian innate immune systems. Key enzymes and receptors involved in Kdo2-lipid A biosynthesis, structural modification and its interaction with the TLR4 pathway represent a clear opportunity for immunopharmacological exploitation. These include the development of novel antibiotics targeting key biosynthetic enzymes and utilization of structurally modified Kdo2-lipid A or correspondingly engineered live bacteria as vaccines and adjuvants. Kdo2-lipid A/TLR4 antagonists can also be applied in anti-inflammatory interventions. This review summarizes recent knowledge on both the fundamental processes of Kdo2-lipid A biosynthesis, structural modification and immune stimulation, and applied research on pharmacological exploitations of these processes for therapeutic development.