(11,12). Heaton and Neuhaus (12) showed that D-alanyl-Dcp donates its D-alanyl residue to the poly(Gro-P) moiety of membrane-associated LTA. Neither the mechanism nor the topology of this D-alanylation reaction is known. To address this key reaction, several groups have identified the genes in a number of organisms containing the dlt operon (11,21,23). In addition to the genes encoding Dcl (dltA) and Dcp (dltC), dltB and dltD encode a putative transport protein (20) and a protein which facilitates the binding of Dcl and Dcp for ligation with Dalanine and has thioesterase activity for mischarged D-alanyl acyl carrier proteins (ACPs) (5), respectively. A gene encoding an enzyme which catalyzes the transfer of the D-alanine residue from D-alanyl-Dcp to membrane-associated LTA has not been identified.Dcp provides the essential link between the ligase (Dcl) and the incorporation of D-alanine into LTA. This carrier protein is a homologue of those ACPs which function in fatty acid biosynthesis and metabolism (4, 26). However, it was unexpected to find that Dcl will ligate D-alanine to ACPs from Escherichia coli, Vibrio harveyi, Saccharopolyspora erythraea, and Bacillus subtilis (12). Nevertheless, only Dcp participates in the D-alanylation of LTA. These observations suggested that there are at least two determinants for interaction of Dcp with its cognate partners, one of which is recognized by Dcl and one of which is recognized by the membrane acceptor LTA. It is this second determinant which is the focus of structural studies on Dcp (B. F. Volkman, Q. Zhang, D. Debabov, E. Rivera, G. Kresheck, and F. C. Neuhaus, unpublished results), and the biochemical studies to be reported here.For Staphylococcus aureus, it was found that growth in the presence of NaCl resulted in a lower D-alanine ester content in LTA (8). The mechanism by which the ester content was reduced during growth in NaCl is unknown and was not correlated with the reaction catalyzed by DltD (5). Instead, an NaCl-activated, thioesterase-like activity specific for D-alanylDcp which is distinct from that catalyzed by DltD was discovered (5, 20).Our goal here was to establish the mechanism of D-alanine transfer from D-alanyl-Dcp to LTA. To accomplish this goal, the thioesterase-like activity of LTA specific for D-alanyl-Dcp was examined in incubations containing LTA in different microenvironments: (i) purified, (ii) membrane associated, and (iii) membrane associated (salt treated). The results suggested that complex formation between D-alanyl-Dcp and LTA is one of the features resulting either in the transfer of D-alanine from D-alanyl-Dcp to LTA when this amphiphile is membrane associated or in the hydrolysis of D-alanyl-Dcp when the LTA is not membrane associated.