Antimicrobial peptides (AMPs) are small, cationic peptides that possess a large spectrum of bioactivities, including antimicrobial, anti-inflammatory and antioxidant activities. Several AMPs are known to inhibit lipopolysaccharide (LPS)-induced inflammation in vitro and to protect animals from sepsis. In this study the cellular anti-inflammatory and anti-endotoxin activities of Os and Os-C, peptides derived from the carboxy-terminal of a tick defensin (OsDef2), were investigated. Both Os and Os-C were found to bind LPS in vitro, albeit to a lesser extent than polymyxin B and melittin, known endotoxin-binding peptides. Binding to LPS was found to reduce the bactericidal activity of Os and Os-C against Escherichia coli confirming the affinity of both peptides for LPS. At a concentration of 25 μM, the nitric oxide (NO) scavenging activity of Os was higher than glutathione (GSH), a known NO scavenger. In contrast, Os-C showed no scavenging activity. Os and Os-C inhibited LPS/IFN-γ induced NO and TNF-α production in RAW 264.7 cells in a concentration-dependent manner, with no cellular toxicity even at a concentration of 100 μM. Although inhibition of NO and TNF-α secretion was more pronounced for melittin and polymyxin B, significant cytotoxicity was observed at concentrations of 1.56 μM and 25 μM for melittin and polymyxin B, respectively. In addition, Os, Os-C and GSH protected RAW 264.7 cells from oxidative damage at concentrations as low as 25 μM. This study identified that besides previously reported antibacterial activity of Os and Os-C, both peptides have in addition anti-inflammatory and anti-endotoxin properties.