Bacterial cell division is a complex, multimolecular process that requires biosynthesis of new peptidoglycan by penicillin-binding proteins (PBPs) during cell wall elongation and septum formation steps. Streptococcus pneumoniae has three bifunctional (class A) PBPs that catalyze both polymerization of glycan chains (glycosyltransfer) and cross-linking of pentapeptidic bridges (transpeptidation) during the peptidoglycan biosynthetic process. In addition to playing important roles in cell division, PBPs are also the targets for beta-lactam antibiotics and thus play key roles in drug-resistance mechanisms. The crystal structure of a soluble form of pneumococcal PBP1b (PBP1b*) has been solved to 1.9 A, thus providing previously undescribed structural information regarding a class A PBP from any organism. PBP1b* is a three-domain molecule harboring a short peptide from the glycosyltransferase domain bound to an interdomain linker region, the transpeptidase domain, and a C-terminal region. The structure of PBP1b* complexed with beta-lactam antibiotics reveals that ligand recognition requires a conformational modification involving conserved elements within the cleft. The open and closed structures of PBP1b* suggest how class A PBPs may become activated as novel peptidoglycan synthesis becomes necessary during the cell division process. In addition, this structure provides an initial framework for the understanding of the role of class A PBPs in the development of antibiotic resistance.