The interaction between host-defense antimicrobial peptides (AMPs) and the bacterial lipopolysaccharide (LPS) governs both the susceptibility of the bacteria to the peptide and the ability of the peptide to inhibit LPS activation of immune cells. Both functions depend on the biophysical properties of the peptides. However, the sequence and structural diversity of AMPs makes it difficult to determine common denominators required for antimicrobial and LPS neutralizing activities. Toward this end, we synthesized and investigated a series of nine 12-amino acid peptides and their fatty acid-conjugated analogues composed of both D- and L-isomers of Leu and Lys at various ratios. The positions of the D-amino acids were preserved. These peptides differ in their net positive charge and hydrophobicity. However, their overall structure in the membrane is similar, as determined by Fourier transform infrared spectroscopy. The peptides and their analogues were functionally tested for their antibacterial and hemolytic activity, their ability to permeate LPS vesicles, their ability to neutralize LPS activation of macrophages, and their effect on LPS morphology, determined by negative staining electron microscopy. The data revealed that increasing the ratio between hydrophobicity and the net positive charge increases both antimicrobial and LPS neutralization activities, but with different modes of contributions. Whereas antimicrobial activity increases linearly with the increase in the peptides' hydrophobicity, peptides with different hydrophobicities are endowed with similar LPS neutralizing activities. Besides adding important information regarding AMP parameters involved in antimicrobial and anti-LPS activities, this study suggests the use of such diastereomers as potential templates for the development of simple molecules that conduct both types of functions.