Lipid A of Rhizobium leguminosarum, a nitrogen-fixing plant endosymbiont, displays several significant structural differences when compared with Escherichia coli. An especially striking feature of R. leguminosarum lipid A is that it lacks both the 1- and 4'-phosphate groups. Distinct lipid A phosphatases that attack either the 1 or the 4' positions have previously been identified in extracts of R. leguminosarum and Rhizobium etli but not Sinorhizobium meliloti or E. coli. Here we describe the identification of a hybrid cosmid (pMJK-1) containing a 25-kb R. leguminosarum 3841 DNA insert that directs the overexpression of the lipid A 1-phosphatase. Transfer of pMJK-1 into S. meliloti 1021 results in heterologous expression of 1-phosphatase activity, which is normally absent in extracts of strain 1021, and confers resistance to polymyxin. Sequencing of a 7-kb DNA fragment derived from the insert of pMJK-1 revealed the presence of a lipid phosphatase ortholog (designated LpxE). Expression of lpxE in E. coli behind the T7lac promoter results in the appearance of robust 1-phosphatase activity, which is normally absent in E. coli membranes. Matrix-assisted laser-desorption/time of flight and radiochemical analysis of the product generated in vitro from the model substrate lipid IVA confirms the selective removal of the 1-phosphate group. These findings show that lpxE is the structural gene for the 1-phosphatase. The availability of lpxE may facilitate the re-engineering of lipid A structures in diverse Gram-negative bacteria and allow assessment of the role of the 1-phosphatase in R. leguminosarum symbiosis with plants. Possible orthologs of LpxE are present in some intracellular human pathogens, including Francisella tularensis, Brucella melitensis, and Legionella pneumophila.