Cloning and nucleotide sequencing indicated that transposon Tn1546 from Enterococcus faecium BM4147 encodes a 23,365 Da protein, VanX, required for glycopeptide resistance. The vanX gene was located downstream from genes encoding the VanA ligase and the VanH dehydrogenase which synthesize the depsipeptide D-alanyl-D-lactate (D-Ala-D-Lac). In the presence of ramoplanin, an Enterococcus faecalis JH2-2 derivative producing VanH, VanA and VanX accumulated mainly UDP-MurNAc-L-Ala-gamma-D-Glu-L-Lys-D-Ala-D-Lac (pentadepsipeptide) and small amounts of UDP-MurNAc-L-Ala-gamma-D-Glu-L-Lys-D-Ala-D-Ala (pentapeptide) in the ratio 49:1. Insertional inactivation of vanX led to increased synthesis of pentapeptide with a resulting change in the ratio of pentadepsipeptide: pentapeptide to less than 1:1. Expression of vanX in E. faecalis and Escherichia coli resulted in production of a D,D-dipeptidase that hydrolysed D-Ala-D-Ala. Pentadepsipeptide, pentapeptide and D-Ala-D-Lac were not substrates for the enzyme. These results establish that VanX is required for production of a D,D-dipeptidase that hydrolyses D-Ala-D-Ala, thereby preventing pentapeptide synthesis and subsequent binding of glycopeptides to D-Ala-D-Ala-containing peptidoglycan precursors at the cell surface.