Neutrophils play an important role in host defense. However, deregulation of neutrophils contributes to tissue damage in severe systemic inflammation. In contrast to complications mediated by an overactive neutrophil compartment, severe systemic inflammation is a risk factor for development of immune suppression and as a result, infectious complications. The role of neutrophils in this clinical paradox is poorly understood, and in this study, we tested whether this paradox could be explained by distinct neutrophil subsets and their functionality. We studied the circulating neutrophil compartment immediately after induction of systemic inflammation by administering 2 ng/kg Escherichia coli LPS i.v. to healthy volunteers. Neutrophils were phenotyped by expression of membrane receptors visualized by flow cytometry, capacity to interact with fluorescently labeled microbes, and activation of the NADPH-oxidase by oxidation of Amplex Red and dihydrorhodamine. After induction of systemic inflammation, expression of membrane receptors on neutrophils, such as CXCR1 and -2 (IL-8Rs), C5aR, FcgammaRII, and TLR4, was decreased. Neutrophils were also refractory to fMLF-induced up-regulation of membrane receptors, and suppression of antimicrobial function was shown by decreased interaction with Staphylococcus epidermis. Simultaneously, activation of circulating neutrophils was demonstrated by a threefold increase in release of ROS. The paradoxical phenotype can be explained by the selective priming of the respiratory burst. In contrast, newly released, CD16(dim) banded neutrophils display decreased antimicrobial function. We conclude that systemic inflammation leads to a functionally heterogeneous neutrophil compartment, in which newly released refractory neutrophils can cause susceptibility to infections, and activated, differentiated neutrophils can mediate tissue damage.