The periplasmic glucans of Gram-negative bacteria, including the membrane-derived oligosaccharides (MDO) of Escherichia coli and the cyclic glucans of the Rhizobiaceae, are now recognized to be a family of closely related substances with important functions in osmotic adaptation and cell signaling. The synthesis of the beta-1,2-glucan backbone of MDO is catalyzed by a membrane-bound glucosyltransferase system previously shown to require UDP-glucose and (surprisingly) acyl carrier protein (Therisod, H., Weissborn, A. C., and Kennedy, E. P. (1986) Proc. Natl. Acad. Sci. U. S. A. 83, 7236-7240). In the present study, no glucan intermediates bound to acyl carrier protein or to UDP could detected. The enzyme system, however, was found to be strongly inhibited by bacitracin and by amphomycin. Because the two antibiotics function by forming specific complexes with polyprenyl phosphates, their inhibitory effect suggests a prenol requirement for MDO biosynthesis. Furthermore, the activity of the glucosyltransferase was greatly stimulated by the addition of polyprenyl phosphates such as decaprenyl-P and dihydroheptaprenyl-P, but not by farnesyl-P. The same membrane preparations carry out the synthesis of polyprenyl-P-glucose, which is also stimulated by added polyprenyl-P, including farnesyl-P, the most active of those tested. Pulse chase experiments, however, indicate that the endogenous pool of polyprenyl-P-glucose cannot be an obligate intermediate in the MDO glucosyltransferase system.