The ape2 gene encoding a hypothetical O-acetylpeptidoglycan esterase was amplified from genomic DNA of Neisseria gonorrhoeae FA1090 and cloned to encode either the full-length protein or a truncated version lacking its hypothetical signal sequence. Expression trials revealed that production of the full-length version possessing either an N-terminal or C-terminal His(6) tag was toxic to Escherichia coli transformants and that the host rapidly degraded the small amount of protein that was produced. An N-terminally truncated protein could be produced in sufficient yields for purification only if it possessed an N-terminal His(6) tag. This form of the protein was isolated and purified to apparent homogeneity, and its enzymatic properties were characterized. Whereas the protein could bind to insoluble peptidoglycan, it did not function as an esterase. Phenotypic characterization of E. coli transformants producing various forms of the protein revealed that it functions instead to O-acetylate peptidoglycan within the periplasm, and it was thus renamed peptidoglycan O-acetyltransferase B. This activity was found to be dependent upon a second protein, which functions to translocate acetate from the cytoplasm to the periplasm, demonstrating that the O-acetylation of peptidoglycan in N. gonorrhoeae, and other gram-negative bacteria, requires a two component system.