The bacterial outer membrane enzyme PagP transfers a palmitate chain from a phospholipid to lipid A. In a number of pathogenic Gram-negative bacteria, PagP confers resistance to certain cationic antimicrobial peptides produced during the host innate immune response. The global fold of Escherichia coli PagP was determined in both dodecylphosphocholine and n-octyl-beta-d-glucoside detergent micelles using solution NMR spectroscopy. PagP consists of an eight-stranded anti-parallel beta-barrel preceded by an amphipathic alpha helix. The beta-barrel is well defined, whereas NMR relaxation measurements reveal considerable mobility in the loops connecting individual beta-strands. Three amino acid residues critical for enzymatic activity localize to extracellular loops near the membrane interface, positioning them optimally to interact with the polar headgroups of lipid A. Hence, the active site of PagP is situated on the outer surface of the outer membrane. Because the phospholipids that donate palmitate in the enzymatic reaction are normally found only in the inner leaflet of the outer membrane, PagP activity may depend on the aberrant migration of phospholipids into the outer leaflet. This finding is consistent with an emerging paradigm for outer membrane enzymes in providing an adaptive response toward disturbances in the outer membrane.