Objective Corticosteroid-binding globulin (CBG) is cleaved by neutrophil elastase converting the high-affinity (haCBG) conformation of CBG to a low-affinity (laCBG) conformation with a ninefold reduced cortisol-binding affinity. These in vitro data suggest that cortisol release by CBG cleavage results in the targeted delivery of cortisol to areas of inflammation. Our objective was to determine whether CBG cleavage alters circulating levels of haCBG and laCBG in vivo in proportion to sepsis severity. Design Prospective, observational cohort study in an adult tertiary level Intensive Care Unit in Adelaide, Australia. Patients Thirty-three patients with sepsis or septic shock grouped by illness severity [sepsis, septic shock survivors, septic shock nonsurvivors and other shock]. Measurements Plasma levels of haCBG and laCBG were assessed using a recently developed in-house assay in patients. Plasma total and free cortisol levels were also measured. Results Plasma total CBG and haCBG levels fell significantly, in proportion to disease severity (P < 0·0001 for both). There was a nonsignificant increase in free and total cortisol as illness severity worsened (P = 0·19 and P = 0·39, respectively). Illness severity was better correlated with haCBG levels than either free or total cortisol levels. Conclusions Increasing illness severity in sepsis and septic shock is associated with markedly reduced circulating haCBG concentrations in vivo. We propose that low levels of haCBG in chronic inflammation may limit the availability of cortisol to inflammatory sites, perpetuating the inflammatory process.