Modification of the bone marrow microenvironment is considered as a promising strategy to control leukemic cell proliferation, diseases progression and relapse after treatment. However, due to the diversity and complexity of the cellular and molecular compartments in the leukemic microenvironment, it is extremely difficult to dissect the role of each individual molecule or cell type in vivo. Here we established an in vitro system to dissect the role of lipopolysaccharide (LPS), stromal cells and endothelial cells in the growth of mouse myeloid tumor cells and B-lymphoma cells. We found that either LPS or bone marrow stromal cells as a feeder layer in culture is required for the proliferation of myeloid tumor cells. Surprisingly, the growth of myeloid leukemic cells on stromal cells is strongly inhibited when coupled with LPS in culture. This opposing effect of LPS, a complete switch from pro-proliferation to antitumor growth is due, at least in part, to the rapidly increased production of interleukin 12, Fas ligand and tissue inhibitor of metalloproteinases-2 from stromal cells stimulated by LPS. These results demonstrate that LPS can either facilitate or attenuate tumor cell proliferation, thus changing the disease course of myeloid leukemias through its direct effect or modulation of the tumor microenvironment.