Escherichia coli lipoproteins are localized to either the inner or outer membrane depending on the residue at position 2. The inner membrane retention signal, Asp at position 2 in combination with certain residues at position 3, functions as a Lol avoidance signal, i.e. the signal inhibits the recognition of lipoproteins by LolCDE that releases lipoproteins from the inner membrane. To understand the role of the residue at position 2, outer membrane-specific lipoproteins with Cys at position 2 were subjected to chemical modification followed by the release reaction in reconstituted proteoliposomes. Sulfhydryl-specific introduction of nonprotein molecules or a negative charge to Cys did not inhibit the LolCDE-dependent release. In contrast, oxidation of Cys to cysteic acid resulted in generation of the Lol avoidance signal, indicating that the Lol avoidance signal requires a critical length of negative charge at the second residue. Furthermore, not only modification of the carboxylic acid of Asp at position 2 but also that of the amine of phosphatidylethanolamine abolished the Lol avoidance function. Based on these results, the Lol avoidance mechanism is discussed.