Ribosomally synthesized post-translationally modified peptides (RiPPs) are a diverse class of biologically active molecules produced by many environmental bacteria. While thousands of these compounds have been identified, mostly through genome mining, a relatively small number has been investigated at the molecular level. One less understood class of RiPPs is the lasso peptides. These are 20-25 amino acid residue compounds bearing an N-terminal macrocyclic ring and a C-terminal tail that is threaded through the ring. We have carried out a detailed investigation on the mechanism of action of the siamycin-I lasso peptide. We demonstrate that siamycin-I interacts with lipid II, the central building block of the major cell wall component peptidoglycan, which is readily accessible on the outside of the cell. This interaction compromises cell wall biosynthesis in a manner that activates the liaI stress response. Additionally, resistance to siamycin-I can be brought about by mutations in the essential WalKR two-component system that causes thickening of the cell wall. Siamycin-I is the first lasso peptide that has been shown to inhibit cell wall biosynthesis.