Innate immune receptors for pathogen- and damage-associated molecular patterns (PAMPs and DAMPs) orchestrate inflammatory responses to infection and injury. Secreted by activated immune cells or passively released by damaged cells, HMGB1 is subjected to redox modification that distinctly influences its extracellular functions. Previously, it was unknown how the TLR4 signalosome distinguished between HMGB1 isoforms. Here we demonstrate that the extracellular TLR4 adaptor, myeloid differentiation factor 2 (MD-2), binds specifically to the cytokine-inducing disulfide isoform of HMGB1, to the exclusion of other isoforms. Using MD-2-deficient mice, as well as MD-2 silencing in macrophages, we show a requirement for HMGB1-dependent TLR4 signaling. By screening HMGB1 peptide libraries, we identified a tetramer (FSSE, designated P5779) as a specific MD-2 antagonist preventing MD-2-HMGB1 interaction and TLR4 signaling. P5779 does not interfere with lipopolysaccharide-induced cytokine/chemokine production, thus preserving PAMP-mediated TLR4-MD-2 responses. Furthermore, P5779 can protect mice against hepatic ischemia/reperfusion injury, chemical toxicity, and sepsis. These findings reveal a novel mechanism by which innate systems selectively recognize specific HMGB1 isoforms. The results may direct toward strategies aimed at attenuating DAMP-mediated inflammation while preserving antimicrobial immune responsiveness.