Lipoglycopeptide antibiotics are more effective than vancomycin against MRSA as they carry an extra aliphatic acyl side chain on glucosamine (Glm) at residue 4 (r4). The biosynthesis of the r4 N-acyl Glc moiety at teicoplanin (Tei) or A40926 has been elucidated, in which the primary amine nucleophile of Glm is freed from the r4 GlcNac pseudo-Tei precursor by Orf2* for the subsequent acylation reaction to occur. In this report, two Orf2* structures in complex with β-D-octyl glucoside or Tei were solved. Of the complexed structures, the substrate binding site and a previously unknown hydrophobic cavity were revealed, wherein r4 GlcNac acts as the key signature for molecular recognition and the cavity allows substrates carrying longer acyl side chains in addition to the acetyl group. On the basis of the complexed structures, a triple-mutation mutant S98A/V121A/F193Y is able to regioselectively deacetylate r6 GlcNac pseudo-Tei instead of that at r4. Thereby, novel analogs can be made at the r6 sugar moiety.