CD14 is a pattern recognition receptor involved in the interaction with multiple ligands, including LPS from Gram-negative bacteria and lipoarabinomannan (LAM) from mycobacteria. While the interactions between LPS and soluble CD14 (sCD14) have been analyzed in detail, LAM/CD14 interactions remain uncharacterized due to the lack of suitable functional assays. We describe herein a novel bioassay for the analysis of CD14/ligand interactions. CD14-negative myeloid HL-60 cells up-regulate endogenous CD14 gene expression when stimulated with LPS in the presence of recombinant soluble CD14 1–348. Using the HL-60 bioassay, we showed that sCD14 1–348 confers responsiveness not only to LPS, but also to LAM. The response to LAM, but not that to LPS, was highly dependent on LPS binding protein (LBP). The N-terminal half of CD14 was sufficient to mediate HL-60 responses to LAM, since HL-60 cells responded with similar efficiency when stimulated with LAM and LBP in the presence of sCD14 1–348 or sCD14 1–152. Thus, the N-terminal 152 amino acids of CD14 contain the site (s) involved in the interaction with LAM and LBP, as well as the residues required for LAM-dependent CD14 signaling.