Vancomycin resistance in enterococci is an increasing clinical problem, and several phenotypes have been identified. We demonstrate here that the resistance mechanism in the constitutively vancomycin-resistant Enterococcus gallinarum BM4174 involves an altered pathway of peptidoglycan synthesis and hydrolysis of the normal precursors in the vancomycin-sensitive pathway. A ligase encoded by the vanC gene catalyses synthesis of D-Ala-D-Ser and substitutes this dipeptide for D-Ala-D-Ala in peptidoglycan precursors. It is presumed that this substitution lowers the affinity of vancomycin for its target site. Destruction of D-Ala-D-Ala (D,D-peptidase activity) and of UDP-MurNAc-L-Ala-D-isoGlu-L-Lys-D-Ala-D-Ala by removal of the terminal D-Ala residue (D,D-carboxypeptidase activity) ensures that the normal vancomycin-sensitive pathway of peptidoglycan synthesis cannot function in the resistant strain.