Toll-like receptors (TLRs) mediate inflammation in sepsis, but their role in sepsis-induced respiratory failure is unknown. Hypoxic pulmonary vasoconstriction (HPV) is a unique vasoconstrictor response that diverts blood flow away from poorly ventilated lung regions. HPV is impaired in sepsis and after challenge with the TLR4 agonist lipopolysaccharide (LPS). Unlike TLR4 agonists, which are present only in Gram-negative bacteria, TLR2 agonists are ubiquitously expressed in all of the major classes of microorganisms that cause sepsis, including both Gram-positive and Gram-negative bacteria and fungi. We tested the hypothesis that (S)-[2,3-bis(palmitoyloxy)-(2RS)-propyl]-N-palmitoyl-(R)-Cys-(S)-Ser(S)-Lys(4)-OH, trihydrochloride (Pam3Cys), a TLR2 agonist, impairs HPV and compared selected pulmonary and systemic effects of Pam3Cys vs. LPS. HPV was assessed 22 h after challenge with saline, Pam3Cys, or LPS by measuring the increase in the pulmonary vascular resistance of the left lung before and during left lung alveolar hypoxia produced by left mainstem bronchus occlusion (LMBO). Additional endpoints included arterial blood gases during LMBO, hemodynamic parameters, weight loss, temperature, physical appearance, and several markers of lung inflammation. Compared with saline, challenge with Pam3Cys caused profound impairment of HPV, reduced systemic arterial oxygenation during LMBO, weight loss, leukopenia, and lung inflammation. In addition to these effects, LPS-challenged mice had lower rectal temperatures, metabolic acidosis, and were more ill appearing than Pam3Cys-challenged mice. These data indicate that TLR2 activation impairs HPV and induces deleterious systemic effects in mice and suggest that TLR2 pathways may be important in sepsis-induced respiratory failure.