The Escherichia coli major outer membrane lipoprotein (Lpp) is released from the inner membrane into the periplasm as a complex with a carrier protein, LolA (p20), and is then specifically incorporated into the outer membrane. An outer membrane protein playing a critical role in Lpp incorporation was identified, and partial amino acid sequences of the protein, named LolB, were identical to those of HemM, which has been suggested to play a role in 5-aminolevulinic acid synthesis in the cytosol. In contrast to this suggested role, the deduced amino acid sequence of HemM implied that the gene encodes a novel outer membrane lipoprotein. Indeed, an antibody raised against highly purified LolB revealed its outer membrane localization, and inhibited in vitro Lpp incorporation into the outer membrane. Furthermore, LolB was found to be synthesized as a precursor with a signal sequence and then processed to a lipid-modified mature form. An E.coli strain possessing chromosomal hemM under the control of the lac promoter-operator required IPTG for growth, indicating that hemM (lolB) is an essential gene. Outer membrane prepared from LolB-depleted cells did not incorporate Lpp. When the Lpp-LolA complex was incubated with a water-soluble LolB derivative, Lpp was transferred from LolA to LolB. Based on these results, the outer membrane localization pathway for E.coli lipoprotein is discussed with respect to the functions of LolA and LolB.