The enzyme 3-deoxy-D-manno-octulosonic acid (Kdo) transferase is encoded by the kdtA gene of Escherichia coli and plays a key role in lipopolysaccharide biosynthesis. It transfers Kdo from CMP-Kdo to lipid A or its tetraacyldisaccharide-1,4'-bisphosphate precursor, lipid IVA. Using a strain that overproduces the transferase approximately 500-fold, we have purified the enzyme to near homogeneity. The subunit molecular mass is approximately 43 kDa. Activity is stimulated by Triton X-100, is maximal at pH 7, but does not require Mg2+. The apparent Km values for lipid IVA and CMP-Kdo are 52 and 88 microM, respectively. Vmax is 15-18 mumol/min/mg when both substrates are added near saturation at pH 8. The purified enzyme transfers 2 Kdo residues to lipid A precursors or analogs bearing four to six fatty acyl chains and a 4'-monosphosphate moiety. Activity is inhibited by polymixin B and Re endotoxin. At low Kdo concentrations small amounts of the intermediate, (Kdo)1-IVA, accumulate. When this substance is isolated and incubated with purified enzyme in the presence of CMP-Kdo, it is converted to (Kdo)2-IVA. Formation of (Kdo)1-IVA is also observed when purified enzyme is incubated with (Kdo)2-IVA and 5 mM CMP, demonstrating that Kdo transfer is reversible. In summary, Kdo transferase consists of a single bifunctional polypeptide that incorporates the 2 innermost Kdo residues common to all lipopolysaccharide molecules in E. coli.