A live fire exercise (LFX) is a military exercise in which live ammunition and ordnance is used, as opposed to blanks or dummies. The term can also be found in non-military usage.

Militaries usually use live-fire exercises as an opportunity to use real ammunition in a realistically created combat situation. The area in which these tests are conducted will be devoid of people to avoid casualties, and will likely be owned by the government that authorized the test. Most live-fire tests are conducted either against derelict equipment (such as tanks and ships) or against remotely controlled drones.

The purpose of this type of exercise is twofold: First, it offers recruits the chance to get accustomed to their weapons so that they will know how to properly operate them. Secondly, this provides soldiers with an opportunity to fire live ammunition without having to worry about an actual enemy returning fire. This allows soldiers to get reacquainted with the feel and time of actually using and expending ammunition, rather than simply simulating the experience. Live-fire exercises of this type can be observed either by remotely controlled cameras or by long-range telescopic devices, such as binoculars.

An army, being the main branch responsible for land combat, is the best known group that conducts live-fire exercises. Most live-fire exercises occur within the military base where the units conducting the exercise are located. In some cases, an installation may host units from another for a larger live-fire exercise. Equipment tested under these circumstances range from small arms and rocket launcher fire to missile systems and artillery fire. In the case of small arms, the tests are usually proficiency based and aimed at ensuring a soldier can fire their assigned weapons. Missile systems may be test-fired at remotely controlled drones to emulate a situation in which enemy missiles or aircraft are launched at allied or friendly forces, while artillery units can take the opportunity to test shells or fire under adverse weather conditions for a chance to test performance of artillery pieces.

An air force, due to its nature, usually limits live-fire exercises to the air, although bombing exercises can be conducted as well.

During live-fire exercises dealing with air-to-air combat, remotely controlled drones are frequently used to simulate enemy aircraft. In modern times, the drones are fired on by planes loaded with some type of air-to-air missile, with the objective of the exercise being to destroy the drone. These tests are usually done to ensure that guidance packages within the missiles will work, although they can be done to test other factors, such as a missile's susceptibility to jamming or to see if a new type of dodging technique will work against the missiles fired.

Live-fire exercises involving air-to-surface work are usually centered around precision-guided munitions. In some cases, tests involving bombs will make use of derelict buildings or, even more frequently, vehicles. Live-fire bombing exercises are usually conducted with precision-guided munitions to ensure that they work correctly, but are also used to test new and experimental weapons to ensure that they work as they were originally designed to. These tests are usually monitored by chase planes and by cameras to determine if everything worked as it was originally intended to.

Live-fire exercises may also be conducted against planes for the purpose of testing a plane's susceptibility to SAM sites, or as a means to test a plane's stealth features.