Abstract The mechanisms by which parenchymal cells interact with immune cells, particularly after removal of LPS, remain unknown. Lung explants from rats, mice deficient in the TNF gene, or human lung epithelial A549 cells were treated with LPS and washed, before naive alveolar macrophages, bone marrow monocytes, or PBMC, respectively, were added to the cultures. When the immune cells were cocultured with LPS-challenged explants or A549 cells, TNF production was greatly enhanced. This was not affected by neutralization of LPS with polymyxin B. The LPS-induced increase in the expression of ICAM-1 on A549 cells correlated with TNF production by PBMC. The cellular cross talk leading to the TNF response was blunted by an anti-ICAM-1 Ab and an ICAM-1 antisense oligonucleotide. In A549 cells, a persistent decrease in the concentration of intracellular cAMP was associated with colocalization of LPS into Toll-like receptor 4 and the Golgi apparatus, resulting in increased ICAM-1 expression. Inhibition of LPS internalization by cytochalasin D or treatment with dibutyryl cAMP attenuated ICAM-1 expression and TNF production by PBMC. In conclusion, lung epithelial cells are not bystanders, but possess memory of LPS through the expression of ICAM-1 that interacts with and activates leukocytes. This may provide an explanation for the failure of anti-LPS therapies in sepsis trials.