The Gram-negative bacterial outer membrane contains lipopolysaccharide, which potently stimulates the mammalian innate immune response. This involves a relay of specialized complexes culminating in transfer of lipopolysaccharide from CD14 to Toll-like receptor 4 (TLR4) and its co-receptor MD-2 on the cell surface, leading to activation of downstream inflammatory responses. In this study we develop computational models to trace the TLR4 cascade in near-atomic detail. We demonstrate through rigorous thermodynamic calculations that lipopolysaccharide molecules traversing the receptor cascade fall into a thermodynamic funnel. An affinity gradient for lipopolysaccharide is revealed upon extraction from aggregates or realistic bacterial outer membrane models and transfer through CD14 to the terminal TLR4/MD-2 receptor-co-receptor complex. We subsequently assemble viable CD14/TLR4/MD-2 oligomers at the plasma membrane surface, and observe lipopolysaccharide exchange between CD14 and TLR4/MD-2. Collectively, this work helps to unravel the key structural determinants governing endotoxin recognition in the TLR4 innate immune pathway.The Gram-negative bacterial outer membrane contains lipopolysaccharide, which potently stimulates the mammalian innate immune response. This involves a relay of specialized complexes culminating in transfer of lipopolysaccharide from CD14 to Toll-like receptor 4 (TLR4) and its co-receptor MD-2 on the cell surface, leading to activation of downstream inflammatory responses. In this study we develop computational models to trace the TLR4 cascade in near-atomic detail. We demonstrate through rigorous thermodynamic calculations that lipopolysaccharide molecules traversing the receptor cascade fall into a thermodynamic funnel. An affinity gradient for lipopolysaccharide is revealed upon extraction from aggregates or realistic bacterial outer membrane models and transfer through CD14 to the terminal TLR4/MD-2 receptor-co-receptor complex. We subsequently assemble viable CD14/TLR4/MD-2 oligomers at the plasma membrane surface, and observe lipopolysaccharide exchange between CD14 and TLR4/MD-2. Collectively, this work helps to unravel the key structural determinants governing endotoxin recognition in the TLR4 innate immune pathway.