Binds bacterial lipopolysaccharide (LPS) (PubMed:17803912, PubMed:17569869). Cooperates with TLR4 in the innate immune response to bacterial lipopolysaccharide (LPS), and with TLR2 in the response to cell wall components from Gram-positive and Gram-negative bacteria (PubMed:11160242, PubMed:11593030). Enhances TLR4-dependent activation of NF-kappa-B (PubMed:10359581). Cells expressing both LY96 and TLR4, but not TLR4 alone, respond to LPS (PubMed:10359581). Heterogeneous homomer formed from homodimers; disulfide-linked (PubMed:11593030, PubMed:12642668). Belongs to the lipopolysaccharide (LPS) receptor, a multi-protein complex containing at least CD14, LY96 and TLR4 (PubMed:11274165). Binds to the extracellular domains of TLR2 and TLR4 (PubMed:10359581, PubMed:11593030, PubMed:17803912). Ligand binding induces interaction with TLR4 and oligomerization of the complex. Retained in the extracellular space at the cell surface by interaction with TLR4 (PubMed:10359581). N-glycosylated; high-mannose.