BACKGROUND: Tracheal aspirates (TAs) from critically ill neonates accumulate bacterial endotoxin and demonstrate mobilization of endotoxin-binding proteins, but the potential bioactivity of endotoxin in TAs is unknown. We characterized innate immune activation in TAs of mechanically ventilated neonates. METHODS: Innate immune activation in TAs of mechanically ventilated neonates was characterized using a targeted 84-gene quantitative real-time (qRT) PCR array. Protein expression of cytokines was confirmed by multiplex assay. Expression and localization of the endotoxin-inducible antimicrobial protein Calgranulin C (S100A12) was assessed by flow cytometry. Endotoxin levels were measured in TA supernatants using the Limulus amoebocyte lysate assay. RESULTS: Analyses by qRT-PCR demonstrated expression of pattern recognition receptors, Toll-like receptor-nuclear factor κB and inflammasome pathways, cytokines/chemokines and their receptors, and anti-infective proteins in TA cells. Endotoxin positivity increased with postnatal age. As compared with endotoxin-negative TAs, endotoxin-positive TAs demonstrated significantly greater tumor necrosis factor (TNF), interleukin (IL)-6, IL-10, and serpin peptidase inhibitor, clade E, member 1 (SERPINE1) mRNA, and IL-10, TNF, and IL-1β protein. Expression of S100A12 protein was localized to TA neutrophils. CONCLUSION: Correlation of endotoxin with TA inflammatory responses suggests endotoxin bioactivity and the possibility that endotoxin antagonists could mitigate pulmonary inflammation and its sequelae in this vulnerable population.