The peptidoglycan of Staphylococcus aureus is characterized by a high degree of crosslinking and almost completely lacks free carboxyl groups, due to amidation of the D-glutamic acid in the stem peptide. Amidation of peptidoglycan has been proposed to play a decisive role in polymerization of cell wall building blocks, correlating with the crosslinking of neighboring peptidoglycan stem peptides. Mutants with a reduced degree of amidation are less viable and show increased susceptibility to methicillin. We identified the enzymes catalyzing the formation of D-glutamine in position 2 of the stem peptide. We provide biochemical evidence that the reaction is catalyzed by a glutamine amidotransferase-like protein and a Mur ligase homologue, encoded by SA1707 and SA1708, respectively. Both proteins, for which we propose the designation GatD and MurT, are required for amidation and appear to form a physically stable bi-enzyme complex. To investigate the reaction in vitro we purified recombinant GatD and MurT His-tag fusion proteins and their potential substrates, i.e. UDP-MurNAc-pentapeptide, as well as the membrane-bound cell wall precursors lipid I, lipid II and lipid II-Gly₅. In vitro amidation occurred with all bactoprenol-bound intermediates, suggesting that in vivo lipid II and/or lipid II-Gly₅ may be substrates for GatD/MurT. Inactivation of the GatD active site abolished lipid II amidation. Both, murT and gatD are organized in an operon and are essential genes of S. aureus. BLAST analysis revealed the presence of homologous transcriptional units in a number of gram-positive pathogens, e.g. Mycobacterium tuberculosis, Streptococcus pneumonia and Clostridium perfringens, all known to have a D-iso-glutamine containing PG. A less negatively charged PG reduces susceptibility towards defensins and may play a general role in innate immune signaling.