The crystal structure of the first endolytic peptidoglycan lytic transglycosylase MltE from Escherichia coli is reported here. The degradative activity of this enzyme initiates the process of cell wall recycling, which is an integral event in the existence of bacteria. The structure sheds light on how MltE recognizes its substrate, the cell wall peptidoglycan. It also explains the ability of this endolytic enzyme to cleave in the middle of the peptidoglycan chains. Furthermore, the structure reveals how the enzyme is sequestered on the inner leaflet of the outer membrane.