Haemolysin secreted by pathogenic Escherichia coli binds to mammalian cell membranes, disrupting cellular activities and lysing cells by pore-formation. It is synthesized as nontoxic prohaemolysin (proHlyA), which is activated intracellularly by a mechanism dependent on the cosynthesized HlyC. Haemolysin is one of a family of membrane-targeted toxins, including the leukotoxins of Pasteurella and Actinobacillus and the bifunctional adenylate cyclase haemolysin of Bordetella pertussis, which require this protoxin activation 1-5. HlyC alone cannot activate proHlyA, but requires a cytosolic activating factor6. Here we report the cytosolic activating factor is identical to the acyl carrier protein and that activation to mature toxin is achieved by the transfer of a fatty acyl group from acyl carrier protein to proHlyA. Only acyl carrier protein, not acyl-CoA, can promote HlyC-directed proHlyA acylation, but a range of acyl groups are effective.