The lipopolysaccharide endotoxin is the most powerful immune stimulant known and a causative agent in the clinical syndrome known as sepsis. Sepsis is responsible for more than 100,000 deaths annually, in large part due to the lack of a rapid, reliable, and sensitive diagnostic technique. This study describes the detection of LPS from E. coli at concentrations as low as 10 ng/mL, in 30 s using an evanescent wave fiber-optic biosensor. Polymyxin B, covalently immobilized onto the surface of the fiber-optic probe, selectively bound fluorescently labeled LPS. Unlabeled LPS was detected in a competitive assay format using labeled LPS for signal generation. The competitive assay format worked in both buffer and plasma with similar sensitivities. This method can be used with other LPS capture molecules such as antibodies, lectins, or antibiotics, to simultaneously detect LPS and to determine the LPS serotype. The LPS assay using the fiber-optic biosensor is applicable to both clinical and environmental testing.