We report a molecular genetic analysis of the region immediately upstream from the Escherichia coli mutL DNA repair gene at 94.8 min. An open reading frame ending 9 bp upstream from the start of mutL corresponds to a 48 kDa polypeptide detected previously in minicells. The predicted amino acid sequence of this 48 kDa polypeptide shows homology to the major N-acetylmuramoyl-L-alanine amidase autolysin of Bacillus subtilis, a known amidase of Bacillus licheniformis, and the product of a Salmonella typhimurium gene that maps near 50 min. Insertions in this upstream gene, which we named amiB, or in mutL did not affect cell shape or viability; however, overexpression of the AmiB polypeptide caused cell lysis, hypersensitivity to osmotic shock and treatment with water, and temporary autolysis by low levels of antibiotics, which are all consistent with AmiB acting as a cell-wall hydrolase. Analysis of chromosomal transcription demonstrated that amiB forms a complex operon with mutL and two additional upstream genes. mutL transcripts also originated from an internal promoter, designated PmutL, located in amiB 312 bp upstream from the translational start of mutL. Together, these results suggest that E. coli contains a second amidase possibly involved in cell-wall hydrolysis, septation, or recycling, and that transcription of this amidase is directly linked to a gene central for DNA repair.