We report an NK-lysin peptide-functionalized nanoporous anodized aluminum oxide (NAAO) based biosensor to detect bacterial endotoxin. Bovine NK-lysin-derived peptides show antimicrobial activity against bacterial pathogens, and bactericidal activity is primarily due to the membranolysis activity. Antimicrobial activity of NK-lysin NK2A was confirmed against a Gram-negative Mannheimia haemolytica and a Gram-positive Staphylococcus aureus. Electron microscopic examination showed the localization of NK2A conjugated silver nanoparticles, but not unconjugated silver nanoparticles used as control, to the bacterial outer membrane and cell wall. NK2A functionalized NAAO membranes were used in a previously developed four-electrode electrochemical configuration to detect the presence of Gram-negative bacterial lipopolysaccharides (LPS) and Gram-positive bacterial lipoteichoic acid (LTA) molecules. NK2A-functionalized NAAO biosensor could detect LPS with a detection limit of 10 ng/mL within an appreciable signal/noise ratio. Biosensors functionalized with a scrambled amino acid version of NK2A (Sc-NK2A) that lacks antimicrobial activity could not detect the presence of LPS. However, both NK2A and Sc-NK2A functionalized biosensors showed sensing signals with Gram-positive bacterial lipoteichoic acids. These results suggest that the specific binding of NK2A-LPS on the NAAO membrane surface is responsible for the observed biosensor signals. These findings suggest that NK2A-functionalized biosensors can be used for rapid and sensitive label-free LPS detection.