Binds bacterial lipopolysaccharide (LPS). 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 (By similarity). Enhances TLR4-dependent activation of NF-kappa-B. Cells expressing both LY96 and TLR4, but not TLR4 alone, respond to LPS. Heterogeneous homomer formed from homodimers; disulfide-linked (By similarity). Belongs to the lipopolysaccharide (LPS) receptor, a multi-protein complex containing at least CD14, LY96 and TLR4 (PubMed:17559944). Binds to the extracellular domains of TLR2 and TLR4. Ligand binding induces interaction with TLR4 and oligomerization of the complex (By similarity). Retained in the extracellular space at the cell surface by interaction with TLR4. N-glycosylated.