Phospho-N-acetylmuramoyl-pentapeptide-transferase (UDP-N-acetyl-muramoyl-L-alanyl-D-gamma-glutamyl-L-lysyl-D-alanyl-D-alanine:undecaprenoid-alcohol-phosphate-phospho-N-acetylmuramoyl-pentapeptide-transferase, EC 2.7.8.13) was solubilized by repeated freezing and thawing of crude envelopes of Escherichia coli K12. The solubilized enzyme was partially purified by gel filtration and ion-exchange chromatography. This preparation contained small amounts of phosphatidylethanolamine, phosphatidylglycerol and diphosphatidylglycerol but no endogenous lipid substrate, C55-isoprenyl phosphate, could be detected. Some catalytic properties (exchange reaction) of the solubilized enzyme were compared to those of membrane-bound transferase. The transfer activity of the partially purified transferase was restored by the addition of an aqueous lipid dispersion. All the transferase activity was found to become incorporated into the liposomes. Preincubation of the transferase preparation with phospholipase A2 or D strongly reduce both exchange and transfer activity. This suggests that phospholipids sensitive to phospholipases are necessary for the enzymatic reaction. Different effects of some neutral detergents on the exchange activity were reported.