Glycopeptides and beta-lactams are the major antibiotics available for the treatment of infections due to Gram-positive bacteria. Emergence of cross-resistance to these drugs by a single mechanism has been considered as unlikely because they inhibit peptidoglycan polymerization by different mechanisms. The glycopeptides bind to the peptidyl-D-Ala(4)-D-Ala(5) extremity of peptidoglycan precursors and block by steric hindrance the essential glycosyltransferase and D,D-transpeptidase activities of the penicillin-binding proteins (PBPs). The beta-lactams are structural analogues of D-Ala(4)-D-Ala(5) and act as suicide substrates of the D,D-transpeptidase module of the PBPs. Here we have shown that bypass of the PBPs by the recently described beta-lactam-insensitive L,D-transpeptidase from Enterococcus faecium (Ldt(fm)) can lead to high level resistance to glycopeptides and beta-lactams. Cross-resistance was selected by glycopeptides alone or serially by beta-lactams and glycopeptides. In the corresponding mutants, UDP-MurNAc-pentapeptide was extensively converted to UDP-MurNAc-tetrapeptide following hydrolysis of D-Ala(5), thereby providing the substrate of Ldt(fm). Complete elimination of D-Ala(5), a residue essential for glycopeptide binding, was possible because Ldt(fm) uses the energy of the L-Lys(3)-D-Ala(4) peptide bond for cross-link formation in contrast to PBPs, which use the energy of the D-Ala(4)-D-Ala(5) bond. This novel mechanism of glycopeptide resistance was unrelated to the previously identified replacement of D-Ala(5) by D-Ser or D-lactate.