The beta-N-acetylglucosaminidase of Escherichia coli was found to have a novel specificity and to be encoded by a gene (nagZ) that maps at 25.1 min. It corresponds to an open reading frame, ycfO, whose predicted amino acid sequence is 57% identical to that of Vibrio furnissii ExoII. NagZ hydrolyzes the beta-1,4 glycosidic bond between N-acetylglucosamine and anhydro-N-acetylmuramic acid in cell wall degradation products following their importation into the cell during the process for recycling cell wall muropeptides. From amino acid sequence comparisons, the novel beta-N-acetylglucosaminidase appears to be conserved in all 12 gram-negative bacteria whose complete or partial genome sequence data are available.