Severe LPS contamination in drugs and food can cause health problems and occasionally mislead research conclusions. To ensure the quality of traditional Chinese medicinal herbs (TCMH), LPS contamination problem should be evaluated. We here described a NFkB activity-based reporter assay to detect LPS contamination. We first created a macrophage cell line with integrated reporter gene consisting of NF-kB-responding sites upstream of the luciferase gene. The presence of LPS leads to NF-kB activation, and thus triggers downstream luciferase expression. The specificity of LPS-derived luciferase activity was confirmed by adding the LPS inhibitor, polymyxin B. In our system, the level of LPS correlates well with luciferase activity. The LPS activity is completely inhibited by polymyxin B, and the limit of LPS detection is 1ng/mL. We also utilized RT-PCR to demonstrate that LPS contamination at the concentration of 1ng/mL was enough to induce expression of downstream inflammatory cytokines TNF-a and IL-6. We further applied the method to examine LPS contamination in TCMH. Among the 35 herbal extracts we examined, about 20% of them exhibited variable but detectable LPS contamination (higher than 1ng/mL). The data indicate that LPS contamination in Chinese herbs should be considered. In addition, the ease and low-background feature of this assay suggest its potential application for systematic detection of LPS contamination in Chinese herbs.