Lipopolysaccharide (LPS), the major cell wall constituent of Gram-negative bacteria, evokes a multitude of biological effects in mammals including pyrogenicity and toxic shock syndrome. Polymyxin B (PmB), a polycationic cyclic peptide, is known to neutralize most of its activities. The nature of the interaction of PmB with LPS and lipid A was investigated by isothermal titration calorimetry. PmB binds to LPS as well as lipid A stoichiometrically and non-co-operatively with micromolar affinity. These interactions are driven primarily by a favourable change in entropy (ΔS) and are endothermic in nature. These positive changes in enthalpies decrease with increasing temperature, yielding a heat capacity change, ΔCp, of -2385 J·mol−1·degree−1 for PmB-LPS interactions while the binding of PmB to lipid A displays a ΔCp of -2259 J·mol−1·degree−1. The negative heat capacity changes provide strong evidence for the role of hydrophobic interactions as the driving force for the association of PmB with LPS and lipid A. A correlation of the energetics of these interactions with analyses of the molecular models of PmB suggests that a cluster of solvent-exposed non-polar amino acid side-chains that line one surface of the molecule, together with a ring of positively charged residues on its other surface, are responsible for its strong and stoichiometric binding to LPS