Bacillithiol (Cys-GlcN-malate, BSH) has recently been identified as a novel low-molecular weight thiol in Bacillus anthracis, Staphylococcus aureus, and several other Gram-positive bacteria lacking glutathione and mycothiol. We have now characterized the first two enzymes for the BSH biosynthetic pathway in B. anthracis, which combine to produce α-d-glucosaminyl l-malate (GlcN-malate) from UDP-GlcNAc and l-malate. The structure of the GlcNAc-malate intermediate has been determined, as have the kinetic parameters for the BaBshA glycosyltransferase (→GlcNAc-malate) and the BaBshB deacetylase (→GlcN-malate). BSH is one of only two natural products reported to contain a malyl glycoside, and the crystal structure of the BaBshA-UDP-malate ternary complex, determined in this work at 3.3 Å resolution, identifies several active-site interactions important for the specific recognition of l-malate, but not other α-hydroxy acids, as the acceptor substrate. In sharp contrast to the structures reported for the GlcNAc-1-d-myo-inositol-3-phosphate synthase (MshA) apo and ternary complex forms, there is no major conformational change observed in the structures of the corresponding BaBshA forms. A mutant strain of B. anthracis deficient in the BshA glycosyltransferase fails to produce BSH, as predicted. This B. anthracis bshA locus (BA1558) has been identified in a transposon-site hybridization study as required for growth, sporulation, or germination [Day, W. A., Jr., Rasmussen, S. L., Carpenter, B. M., Peterson, S. N., and Friedlander, A. M. (2007) J. Bacteriol. 189, 3296-3301], suggesting that the biosynthesis of BSH could represent a target for the development of novel antimicrobials with broad-spectrum activity against Gram-positive pathogens like B. anthracis. The metabolites that function in thiol redox buffering and homeostasis in Bacillus are not well understood, and we present a composite picture based on this and other recent work.