Lipoteichoic acid (LTA) is a crucial cell envelope component in Gram-positive bacteria. In Staphylococcus aureus, the polyglycerolphosphate LTA molecule is synthesized by LtaS, a membrane-embedded enzyme with five N-terminal transmembrane helices (5TM domain) that are connected via a linker region to the C-terminal extracellular enzymatic domain (eLtaS). The LtaS enzyme is processed during bacterial growth, and the eLtaS domain is released from the bacterial membrane. Here we provide experimental evidence that the proteolytic cleavage following residues 215Ala-Leu-Ala217 is performed by the essential S. aureus signal peptidase SpsB, as depletion of spsB results in reduced LtaS processing. In addition, the introduction of a proline residue at the +1 position with respect to the cleavage site, a substitution known to inhibit signal peptidase-dependent cleavage, abolished LtaS processing at this site. It was further shown that the 5TM domain is crucial for enzyme function. The observation that the construction of hybrid proteins between two functional LtaS-type enzymes resulted in the production of proteins unable to synthesize LTA suggests that specific interactions between the 5TM and eLtaS domains are required for function. No enzyme activity was detected upon expression of the 5TM and eLtaS domains as separate fragments, indicating that the two domains cannot assemble postsynthesis to form a functional enzyme. Taken together, our data suggest that only the full-length LtaS enzyme is active in the LTA synthesis pathway and that the proteolytic cleavage step is used as a mechanism to irreversibly inactivate the enzyme.