Lipopolysaccharide (LPS), an endotoxin of Gram-negative bacteria, activates the innate immunity system through a receptor complex of myeloid differentiation 2 (MD-2) and toll-like receptor 4 (TLR4). MD-2 directly recognizes the lipid A domain of LPS, which triggers MD-2/TLR4-mediated cellular response aimed at eliminating the invaded pathogen. However, excess production of inflammatory mediators is harmful to host tissue and this can cause septic death in extreme cases. MD-2 represents an attractive therapeutic target of inflammatory and immune diseases in human. In particular, eritoran is a synthetic tetraacylated lipid A that binds directly to MD-2 and antagonizes LPS binding to the same site, and it ameliorates various inflammatory conditions due to infection or sterile organ injury. In this review, we outline the recent advances in the structure biology of ligand interaction with MD-2/TLR4, and highlight the MD-2-directed LPS antagonists, which are natural and synthetic chemicals, under development to treat inflammatory diseases.