D-aspartate ligase has remained the last unidentified peptide bond-forming enzyme in the peptidoglycan assembly pathway of Gram-positive bacteria. Here we show that a two-gene cluster of Enterococcus faecium encodes aspartate racemase (Racfm) and ligase (Aslfm) for incorporation of D-Asp into the side chain of the peptidoglycan precursor. Aslfm was identified as a new member of the ATP-grasp protein superfamily, which includes a diverse set of enzymes catalyzing ATP-dependent carboxylate-amine ligation reactions. Aslfm specifically ligated the beta-carboxylate of D-Asp to the epsilon-amino group of L-Lys in the nucleotide precursor UDP-N-acetylmuramyl-pentapeptide. D-iso-asparagine was not a substrate of Aslfm, indicating that the presence of this amino acid in the peptidoglycan of E. faecium results from amidation of the alpha-carboxyl of D-Asp after its addition to the precursor. Heterospecific expression of the genes encoding Racfm and Aslfm in Enterococcus faecalis led to production of stem peptides substituted by D-Asp instead of L-Ala2, providing evidence for the in vivo specificity and function of these enzymes. Strikingly, sequencing of the cross-bridges revealed that substitution of L-Ala2 by D-Asp is tolerated by the d,d-transpeptidase activity of the penicillin-binding proteins both in the acceptor and in the donor substrates. The Aslfm ligase appears as an attractive target for the development of narrow spectrum antibiotics active against multiresistant E. faecium.