Mutations in the Escherichia coli lpp gene resulting in the alterations of the COOH-terminal region of the lipoprotein have been isolated by oligonucleotide-directed mutagenesis. As might be expected, substitution of Lys78 with Arg78 completely abolished the formation of murein-bound lipoprotein. Each of the following single amino acid substitutions did not significantly affect the formation of bound-form lipoprotein: Asp70 to Glu70 or Gly70; Lys75 to Thr75; and Tyr76 to His76, Ile76, or Leu76. In contrast, mutational alterations of Tyr76 to Cys76, Gly76, Asn76, Pro76, or Ser76 resulted in a reduction of the bound-form lipoprotein to levels of 14-32% of that in the wild-type strain. A common feature of these lpp COOH-terminal mutations affecting the formation of bound-form lipoprotein is the presence of a beta-turn secondary structure at the COOH-terminal region of all these mutant lipoproteins. In addition, substitution of Tyr76 to Asp76 or Glu76, and Arg77 to Asp77 or Leu77 also resulted in a reduced formation of the bound-form lipoprotein. These results suggest that the formation of murein-bound lipoprotein requires a COOH-terminal Lys residue and a positively charged COOH-terminal region. Furthermore, a beta-turn secondary structure in the COOH-terminal random coil region interferes with the attachment of the lipoprotein to the peptidoglycan.