Enzymes in lipid metabolism acquire and deliver hydrophobic substrates and products from within lipid bilayers. The structure at 2.55 Å of one isozyme of a constitutive enzyme in lipid A biosynthesis, LpxI from Caulobacter crescentus, has a novel fold. Two domains close around a completely sequestered substrate, UDP-2,3-diacylglucosamine, and open to release products either to the neighboring enzyme in a putative multienzyme complex or to the bilayer. Mutation analysis identifies Asp225 as key to Mg(2+)-catalyzed diphosphate hydrolysis. These structures provide snapshots of the enzymatic synthesis of a critical lipid A precursor.