Bacterial lipoproteins are embedded in the cell membrane of both Gram-positive and Gram-negative bacteria, where they serve numerous functions central to cell envelope physiology. Lipoproteins are tethered to the membrane by an N-acyl-S-(mono/di)-acyl-glyceryl-cysteine anchor that is variously acylated depending on the genus. In several low-GC, Gram-positive firmicutes, a monoacyl-glycerylcysteine with an N-terminal fatty acid (known as the lyso form) has been reported, though how it is formed is unknown. Here, through an intergenic complementation rescue assay in Escherichia coli, we report the identification of a common orthologous transmembrane protein in both Enterococcus faecalis and Bacillus cereus that is capable of forming lyso-form lipoproteins. When deleted from the native host, lipoproteins remain diacylated with a free N terminus, as maturation to the N-acylated lyso form is abolished. Evidence is presented suggesting that the previously unknown gene product functions through a novel intramolecular transacylation mechanism, transferring a fatty acid from the diacylglycerol moiety to the ␣-amino group of the lipidated cysteine. As such, the discovered gene has been named lipoprotein intramolecular transacylase (lit), to differentiate it from the gene for the intermolecular N-acyltransferase (lnt) involved in triacyl lipoprotein biosynthesis in Gram-negative organisms.IMPORTANCE This study identifies a new enzyme, conserved among low-GC, Grampositive bacteria, that is involved in bacterial lipoprotein biosynthesis and synthesizes lyso-form lipoproteins. Its discovery is an essential first step in determining the physiological role of N-terminal lipoprotein acylation in Gram-positive bacteria and how these modifications impact bacterial cell envelope function.KEYWORDS firmicutes, acyl transferase, lipoproteins L ipoproteins are bacterial cell membrane components common throughout Gramnegative and Gram-positive bacteria, constituting 2 to 5% of all cellular proteins (1-5). Lipoproteins invariably contain a signature acylated N-terminal cysteine residue that tethers an otherwise soluble globular protein domain to the membrane surface. Positioned at the membrane-environment interface, lipoproteins play critical roles in ion and nutrient capture, solute transport, cell adhesion, and assembly of protein complexes and as protein-folding chaperones.All lipoproteins are initially translated as precursors containing an N-terminal signal peptide harboring a conserved amino acid lipobox motif sequence preceding an invariant cysteine residue (6, 7). Once transported to the outer face of the membrane, prolipoprotein diacylglycerol transferase (Lgt) attaches a diacylglycerol residue from a phospholipid donor through a thioether bond (8). Signal peptidase II (Lsp) then cleaves the leader peptide immediately upstream from the cysteine to liberate the ␣-amino group (9). In Escherichia coli and other Gram-negative bacteria, biosynthesis is completed by an apolipoprotein N-acyltransferase (Lnt), which transfers a...