The hospital-acquired pathogen Acinetobacter baumannii possesses a complex cell envelope that is key to its multidrug resistance and virulence. The bacterium, however, lacks many canonical enzymes that build the envelope in model organisms. Instead, A. baumannii contains a number of poorly annotated proteins that may allow alternative mechanisms of envelope biogenesis. We demonstrated previously that one of these unusual proteins, ElsL, is required for cell elongation and for withstanding antibiotics that attack the septal cell wall. Curiously, ElsL is composed of a leaderless YkuD-family domain usually found in secreted, cell-wall-modifying L,D-transpeptidases (LDTs). Here, we show that, rather than being an LDT, ElsL is actually a new class of cytoplasmic L,D-carboxypeptidase (LDC) that provides a critical step in cell-wall recycling previously thought to be missing from A. baumannii. Absence of ElsL impairs cell wall integrity, elongation, and intrinsic resistance due to buildup of murein tetrapeptide precursors, toxicity of which is bypassed by preventing muropeptide recycling. Multiple pathways in the cell become sites of vulnerability when ElsL is inactivated, including L,D-crosslink formation, cell division, and outer membrane lipid homoeostasis, reflecting its pleiotropic influence on cell envelope physiology. We thus reveal a novel class of cell-wall-recycling LDC critical to growth and homeostasis of A. baumannii and likely many other bacteria.