Skeletal muscle atrophy is a decrease in muscle mass that occurs when protein degradation exceeds protein synthesis. Leucine (Leu), an essential branched-chain amino acid in animal nutrition, regulates skeletal muscle protein metabolism. Two experiments were conducted to evaluate whether Leu could alleviate lipopolysaccharide (LPS)-induced skeletal muscle wasting by modulating skeletal muscle protein synthesis and degradation. A total of 24 rats were randomly allocated into three groups (n = 8): (1) non-challenged control; (2) LPS-challenged control; and (3) LPS +3.0% Leu. Rats were fed with control or Leu-supplemented (part of the casein was replaced with 3.0% Leu) diets throughout the trial and were injected intraperitoneally with sterile saline or LPS at days 6, 11, 16, and 21. On the morning of day 22, serum samples were collected and rats were then sacrificed for liver and muscle analysis. In vitro protein degradation, nuclear factor-κB (NF-κB) activity, and proteolytic enzyme activities of the muscles from immune-challenged rats were also measured. Our results showed that the LPS challenge resulted in not only enhanced serum interleukin-1 and liver C-reactive protein (CRP) concentrations but also decreased the average daily body weight gain and muscle fiber diameter. However, dietary Leu inclusion attenuated the increase in CRP level and the decrease in muscle fiber diameter. Importantly, the LPS challenge caused a significant elevation in the muscle proteolysis rate, but dietary Leu supplementation significantly blocked the muscle proteolysis. The mRNA expression of NF-κB, muscle atrophy F-box (MAFbx), and muscle ring finger 1 (MuRF1) was upregulated by the LPS challenge in gastrocnemius muscles, but was downregulated by Leu supplementation. Interestingly, when muscles from the LPS-challenged rats were incubated with Leu in vitro, proteasome-, calpain-, and cathepsin-L-dependent muscle proteolysis and NF-κB activity were decreased. Collectively, the data suggest that Leu supplementation could inhibit excessive skeletal muscle degradation, as well as enhance protein synthesis and, thus, attenuate the negative effects caused by the LPS-induced immune challenge.