The hypothetical Escherichia coli protein YfhD has been identified as the archetype for the family 1B lytic transglycosylases despite a complete lack of experimental characterization. The yfhD gene was amplified from the genomic DNA of E. coli W3110 and cloned to encode a fusion protein with a C-terminal His(6) sequence. The enzyme was found to be localized to the outer membrane of E. coli, as would be expected for a lytic transglycosylase. Its gene was engineered for the production of a truncated soluble enzyme derivative lacking an N-terminal signal sequence and membrane anchor. The soluble YfhD derivative was purified to apparent homogeneity, and three separate in vitro assays involving high pressure liquid chromatography and matrix-assisted laser desorption ionization time-of-flight mass spectrometry were used to demonstrate the YfhD-catalyzed release of 1,6-anhydromuro-peptides from insoluble peptidoglycan. In addition, an in vivo bioassay developed using the bacteriophage lambda lysis system confirmed that the enzyme functions as an autolysin. Based on these data, the enzyme was renamed membrane-bound lytic transglycosylase F. The modular structure of MltF was investigated through genetic engineering for the separate production of identified N-terminal and C-terminal domains. The ability to bind peptidoglycan and lytic activity were only associated with the isolated C-terminal domain. The enzymatic properties of this lytic transglycosylase domain were found to be very similar to those of the wild-type enzyme. The one notable exception was that the N-terminal domain appears to modulate the lytic behavior of the C-terminal domain to permit continued lysis of insoluble peptidoglycan, a unique feature of MltF compared with other characterized lytic transglycosylases.