d‐Alanyl‐d‐alanine carboxypeptidase DacC is important for synthesis and stabilization of the peptidoglycan layer of Escherichia coli. In this work, dacC of E. coli BL21 (DE3) was successfully deleted, and the effects of this deletion on extracellular protein production in E. coli were investigated. The extracellular activities and fluorescence value of recombinant amylase, green fluorescent protein, and α‐galactosidase of the deletion mutants were increased by 82.3, 29.1, and 37.7%, respectively, compared with that of control cells. The outer membrane permeability and intracellular soluble peptidoglycan accumulation of deletion mutant were also enhanced compared with those of control cells, respectively. Based on fluorescence‐assisted cell sorting analyses, we found that the morphology of the E. coli deletion mutant cells was altered compared with that of control cells. Local transparent bulges in the poles of the E. coli mutant with deletion of the dacC gene were found by transmission electron microscopy analysis. These bulges in the poles could explain the improvement in the production of extracellular protein by the E. coli mutant with deletion of the dacC gene. These findings provide important insights into the extracellular production of proteins using E. coli as microbial cell factories.