Bacteria surround their cytoplasmic membrane with an essential, stress-bearing peptidoglycan (PG) layer. Growing and dividing cells expand their PG layer by using membrane-anchored PG synthases, which are guided by dynamic cytoskeletal elements. In Escherichia coli, growth of the mainly single-layered PG is also regulated by outer membrane-anchored lipoproteins. The lipoprotein LpoB is required for the activation of penicillin-binding protein (PBP) 1B, which is a major, bifunctional PG synthase with glycan chain polymerizing (glycosyltransferase) and peptide cross-linking (transpeptidase) activities. Here, we report the structure of LpoB, determined by NMR spectroscopy, showing an N-terminal, 54-aalong flexible stretch followed by a globular domain with similarity to the N-terminal domain of the prevalent periplasmic protein TolB. We have identified the interaction interface between the globular domain of LpoB and the noncatalytic UvrB domain 2 homolog domain of PBP1B and modeled the complex. Amino acid exchanges within this interface weaken the PBP1B-LpoB interaction, decrease the PBP1B stimulation in vitro, and impair its function in vivo. On the contrary, the N-terminal flexible stretch of LpoB is required to stimulate PBP1B in vivo, but is dispensable in vitro. This supports a model in which LpoB spans the periplasm to interact with PBP1B and stimulate PG synthesis. P eptidoglycan (PG) is an essential component of the bacterial cell envelope, required for cell shape and stability. It is composed of glycan chains that are connected by short peptides, and forms a net-like, elastic structure, called the sacculus, which encases the cytoplasmic/inner membrane (IM) (1). In Gramnegative bacteria, such as Escherichia coli, the sacculus is mainly single-layered and is firmly attached to the outer membrane (OM) by abundant OM proteins. Some of the most effective antibiotic agents, such as the β-lactams and glycopeptides, inhibit PG biosynthesis, resulting in cell lysis.Bacteria enlarge their sacculus by polymerizing new PG from lipid II precursor at the outer face of the IM and incorporating the newly made material into the existing PG layer. At the same time, a significant amount of old material is released. For synthesis and hydrolysis to be coupled, the corresponding enzymes have to be tightly regulated and coordinate their actions (2). How does this happen? The current view is that PG synthases [penicillin-binding proteins (PBPs)] and hydrolases form membrane-anchored multienzyme complexes, which are driven by cytoskeletal elements. More recently, it was established that dedicated regulators tightly control the activities of PG synthases and hydrolases and/or couple it to other cell envelope processes (3-6).PG synthesis requires glycosyltransferases (GTases) to polymerize the glycan chains and transpeptidases (TPases) to form peptide cross-links. Most bacteria carry several PG synthases, which can perform one or both enzymatic reactions. In E. coli, the bifunctional GTase/TPases PBP1A and PBP1B provide the main PG...