Escherichia coli lipoproteins are anchored to the periplasmic surface of the inner or outer membrane depending on the sorting signal. An ATP-binding cassette (ABC) transporter, LolCDE, releases outer membrane-specific lipoproteins from the inner membrane, causing the formation of a complex between the released lipoproteins and the periplasmic molecular chaperone LolA. When this complex interacts with outer membrane receptor LolB, the lipoproteins are transferred from LolA to LolB and then localized to the outer membrane. The structures of LolA and LolB are remarkably similar to each other. Both have a hydrophobic cavity consisting of an unclosed beta-barrel and an alpha-helical lid. Structural differences between the two proteins reveal the molecular mechanisms underlying the energy-independent transfer of lipoproteins from LolA to LolB. Strong inner membrane retention of lipoproteins occurs with Asp at position 2 and a few limited residues at position 3. The inner membrane retention signal functions as a Lol avoidance signal and inhibits the recognition of lipoproteins by LolCDE, thereby causing their retention in the inner membrane. The positive charge of phosphatidylethanolamine and the negative charge of Asp at position 2 are essential for Lol avoidance. The Lol avoidance signal is speculated to cause the formation of a tight lipoprotein-phosphatidylethanolamine complex that has five acyl chains and therefore cannot be recognized by LolCDE.