Lipoic acid is essential for the activation of a number of protein complexes involved in key metabolic processes. Growth of Mycobacterium tuberculosis relies on a pathway in which the lipoate attachment group is synthesized from an endogenously produced octanoic acid moiety. In patients with multiple-drug-resistant M. tuberculosis, expression of one gene from this pathway, lipB, encoding for octanoyl-[acyl carrier protein]-protein acyltransferase is considerably up-regulated, thus making it a potential target in the search for novel antiinfectives against tuberculosis. Here we present the crystal structure of the M. tuberculosis LipB protein at atomic resolution, showing an unexpected thioether-linked active-site complex with decanoic acid. We provide evidence that the transferase functions as a cysteine/lysine dyad acyltransferase, in which two invariant residues (Lys-142 and Cys-176) are likely to function as acid/base catalysts. Analysis by MS reveals that the LipB catalytic reaction proceeds by means of an internal thioesteracyl intermediate. Structural comparison of LipB with lipoate protein ligase A indicates that, despite conserved structural and sequence active-site features in the two enzymes, 4'-phosphopantetheine-bound octanoic acid recognition is a specific property of LipB.