The bacterial enzyme AmpD is an early catalyst in commitment of cell wall metabolites to the recycling events within the cytoplasm. The key internalized metabolite of cell wall recycling, beta-D-N-acetylglucosamine-(1-->4)-1,6-anhydro-beta-N-acetylmuramyl-L-Ala-gamma-D-Glu-meso-DAP-D-Ala-D-Ala (compound 1), is a poor substrate for AmpD. Two additional metabolites, 1,6-anhydro-N-acetylmuramyl-peptidyl derivatives 2a and 2c, served as substrates for AmpD with a k(cat)/K(m) of >10(4) M(-1) s(-1). The enzyme hydrolytically processes the lactyl amide bond of the 1,6-anhydro-N-acetylmuramyl moiety. The syntheses of these substrates and other ligands are reported herein, which made the characterization of the enzymic reaction possible. Furthermore, it is documented that the enzyme is specific for both the atypical peptide stem of the cell wall fragments and the presence of the sterically encumbered 1,6-anhydro-N-acetylmuramyl moiety; hence it is a peptidase with a unique function in bacterial physiology. The implications of the function of this catalyst for the entry into the cell wall recycling events and the reversal of induction of the production of beta-lactamase, an antibiotic resistance determinant, are discussed.