Endotoxin, also known as lipopolysaccharide (LPS), is the major mediator of septic shock due to Gram-negative bacterial infections. Recently, much attention has been focused on cationic peptides which possess the potential to detoxify LPS. Limulus anti-LPS factor (LALF), a protein found in the horseshoe crab (Limulus polyphemus), has been proved with striking anti-LPS effects. We synthesized a cyclic peptide (CLP-19), and then investigated its bioactivity both in vitro and in vivo. The ability of CLP-19 to neutralize LPS in vitro was tested using a Limulus amebocyte lysate (LAL) assay and the LPS-binding affinity was measured with an affinity biosensor method. The synthetic peptide LALF31-52 (residues 31 to 52 of LALF) was used as the positive control peptide in this study. It was found that CLP-19 exhibited the significant activity to antagonize LPS without observable cytotoxicity effect on mouse macrophages. CLP-19 directly bound to LPS, and neutralized it in a dose-dependent manner in the LAL assay. Moreover, CLP-19 also showed the remarkable ability to protect mice from lethal LPS attack and to inhibit the LPS-induced tumor necrosis factor alpha (TNF-α) release by decreasing serum LPS in vivo. Our work suggests that this peptide is worthy of further investigation as a potential anti-LPS agent in the treatment of septic shock.