Lipid A, the hydrophobic anchor of lipopolysaccharides in the outer membranes of Gram-negative bacteria, varies in structure among different Rhizobiaceae. The Rhizobium meliloti lipid A backbone, like that of Escherichia coli, is a beta1'-6-linked glucosamine disaccharide that is phosphorylated at positions 1 and 4'. Rhizobium leguminosarum lipid A lacks both phosphates, but contains aminogluconate in place of the proximal glucosamine 1-phosphate, and galacturonic acid instead of the 4'-phosphate. A peculiar feature of the lipid As of all Rhizobiaceae is acylation with 27-hydroxyoctacosanoic acid, a long hydroxylated fatty acid not found in E. coli. We now describe an in vitro system, consisting of a membrane enzyme and a cytosolic acyl donor from R. leguminosarum, that transfers 27-hydroxyoctacosanoic acid to (Kdo)2-lipid IVA, a key lipid A precursor common to both E. coli and R. leguminosarum. The 27-hydroxyoctacosanoic acid moiety was detected in the lipid product by mass spectrometry. The membrane enzyme required the presence of Kdo residues in the acceptor substrate for activity. The cytosolic acyl donor was purified from wild-type R. leguminosarum using the acylation of (Kdo)2-[4'-32P]-lipid IVA as the assay. Amino-terminal sequencing of the purified acyl donor revealed an exact 19-amino acid match with a partially sequenced gene (orf*) of R. leguminosarum. Orf* contains the consensus sequence, DSLD, for attachment of 4'-phosphopantetheine. When the entire orf* gene was sequenced, it was found to encode a protein of 92 amino acids. Orf* is a new kind of acyl carrier protein because it is only approximately 25% identical both to the constitutive acyl carrier protein (AcpP) and to the inducible acyl carrier protein (NodF) of R. leguminosarum. Mass spectrometry of purified active Orf* confirmed the presence of 4'-phosphopantetheine and 27-hydroxyoctacosanoic acid in the major species. Smaller mass peaks indicative of Orf* acylation with hydroxylated 20, 22, 24, and 26 carbon fatty acids were also observed. Given the specialized function of Orf* in lipid A acylation, we suggest the new designation AcpXL.