The distribution of PBP5, the major D,D-carboxypeptidase in Escherichia coli, was mapped by immunolabelling and by visualization of GFP fusion proteins in wild-type cells and in mutants lacking one or more D,D-carboxypeptidases. In addition to being scattered around the lateral envelope, PBP5 was also concentrated at nascent division sites prior to visible constriction. Inhibiting PBP2 activity (which eliminates wall elongation) shifted PBP5 to midcell, whereas inhibiting PBP3 (which aborts divisome invagination) led to the creation of PBP5 rings at positions of preseptal wall formation, implying that PBP5 localizes to areas of ongoing peptidoglycan synthesis. A PBP5(S44G) active site mutant was more evenly dispersed, indicating that localization required enzyme activity and the availability of pentapeptide substrates. Both the membrane bound and soluble forms of PBP5 converted pentapeptides to tetrapeptides in vitro and in vivo, and the enzymes accepted the same range of substrates, including sacculi, Lipid II, muropeptides and artificial substrates. However, only the membrane-bound form localized to the developing septum and restored wild-type rod morphology to shape defective mutants, suggesting that the two events are related. The results indicate that PBP5 localization to sites of ongoing peptidoglycan synthesis is substrate dependent and requires membrane attachment.