Lipoic acid is a sulfur containing cofactor, indispensable for the function of several metabolic enzymes. In microorganisms, lipoic acid can be salvaged from the surroundings by Lipoate protein ligase A (LplA), an ATP-dependent enzyme. Alternatively, it can be synthesized by the sequential action of Lipoate protein ligase B (LipB) and Lipoyl synthase (LipA). LipB uptakes octanoyl- chain from C8-acyl carrier protein (C8-ACP), a byproduct of the type II fatty acid synthesis pathway and transfers it to a conserved lysine of the lipoyl domain of a dehydrogenase. The molecular basis of substrate recognition by LipB is still not fully understood. Using E. coli LipB as a model enzyme, we show that an octanoyl-transferase mainly recognizes the 4-phosphopantetheine tethered acyl-chain of its donor substrate and weakly binds the apo-acyl carrier protein. LipB can accept octanoate- from its own ACP, noncognate ACPs, as well as C8-CoA. Further, our NMR studies demonstrate the presence of an adenine and phosphate binding site in LipB, akin to LplA. A loop containing 71RGG73 sequence, analogous to the lipoate binding loop of LplA is also conserved in LipB. Collectively, our studies highlight commonalities between LipB and LplA in their mechanism of substrate recognition. This knowledge might be of significance in the treatment of mitochondrial fatty acid synthesis related disorders.