By assaying lysates of Escherichia coli generated with the hybrid λ bacteriophages of an ordered library (Kohara, Y., Akiyama, K., and Isono, K. (1987) Cell 50, 495-508), we identified two clones (A232 and A233) capable of overexpressing the lauroyl transferase that functions after 3-deoxy-D-monno-octulosonic acid (Kdo) addition in lipid A biosynthesis (Brozek, K. A., and Raetz, C. R. H. (1990) J. Biol. Chem. 265, 15410-15417). The E. coli DNA inserts in λ232 and λ233 suggested that a known gene (htrB) required for rapid growth above 33 °C might encode the lauroyl transferase. Using the intermediate (Kdo)2-lipid IVA as the laurate acceptor, extracts of strains with transposon insertions in htrB were found to contain no lauroyl transferase activity. Cells harboring hybrid htrB+ plasmids overproduced transferase activity 100-200-fold. The overproduced transferase was solubilized with a non-ionic detergent and purified further by DEAE-Sepharose chromatography. With lauroyl acyl carrier protein as the donor, the purified enzyme rapidly incorporated one laurate residue into (Kdo)2-lipid IVA. The rate of laurate incorporation was reduced by several orders of magnitude when either one or both Kdos were absent in the acceptor. With a matched set of acyl-acyl carrier proteins, the enzyme incorporated laurate 3-8 times faster than decanoate or myristate, respectively. Transfer of palmitate, palmitoleate, or R-3-hydroxymyristate was very slow. Taken together with previous studies, our findings indicate that htrB encodes a key, late functioning acyltransferase of lipid A biosynthesis.