Effect of lipopolysaccharide (LPS) on RAW264.7 macrophage cell line was studied. LPS-treated RAW264.7 cells increased in cell size and acquired distinct dendritic morphology. At the optimal dose of LPS (1 μg/ml), almost 70% RAW264.7 cells acquired dendritic morphology. Flow cytometric studies indicate that the cell surface markers known to be expressed on dendritic cells and involved in antigen presentation and T cell activation (B7.1, B7.2, CD40, MHC class II antigens and CD1d) were also markedly upregulated on LPS-treated RAW264.7 cells. Our results suggest the possibility that LPS by itself could constitute a sufficient signal for differentiation of macrophages into DC-like cells.