The excC mutants of Escherichia coli are hypersensitive to drugs such as cholic acid and release periplasmic proteins into the extracellular medium. A 1884 bp fragment carrying the excC gene was isolated and sequenced. It contains the 3' end of the tolB gene which maps at min 17 on the E. coli map and an open reading frame which encodes the 18,748 Da ExcC protein. The protein is composed of a hydrophobic region of 22 residues and displayed an overall hydrophilic configuration. It was shown that the ExcC protein is indeed the PAL (peptidoglycan-associated lipoprotein) described by Mizuno (1979). The pal gene had not yet been characterized on the E. coli linkage map since no obvious phenotype could be identified for mutations in this gene. A topologic analysis of the PAL protein using PAL-PhoA translational fusions showed that PAL is associated with the outer membrane only by its N-terminal moiety. The carboxy-terminal part of the protein is necessary for correct interaction of PAL with the peptidoglycan layer.