The Peptidoglycan (PG) cell wall of the Lyme disease (LD) spirochete, Borrelia burgdorferi (Bb), contributes to structural and morphological integrity of Bb; is a persistent antigen in LD patients; and has a unique pentapeptide with L-Ornithine as the third amino acid that cross-links its glycan polymers. A borrelial homolog (BB_0167) interacted specifically with borrelilal PG via its peptidoglycan interacting motif (MHELSEKRARAIGNYL); was localized to the protoplasmic cylinder of Bb; and was designated as Borrelia peptidoglycan interacting Protein (BpiP). A bpiP mutant displayed no defect under in vitro growth conditions with similar levels of several virulence-related proteins. However, the burden of bpiP mutant in C3H/HeN mice at day 14, 28 and 62 post-infection was significantly lower compared to control strains. No viable bpiP mutant was re-isolated from any tissues at day 62 post-infection although bpiP mutant was able to colonize immunodeficient SCID at day 28 post-infection. Acquisition or transmission of bpiP mutant by Ixodes scapularis larvae or nymphs respectively, from and to mice, was significantly lower compared to control strains. Further analysis of bpiP mutant revealed increased sensitivity to vancomycin, osmotic stress, lysosomal extracts, human antimicrobial peptide cathelicidin-LL37, complement-dependent killing in the presence of day 14 post-infection mouse serum and increased internalization of CFSC-labeled bpiP mutant by macrophages and dendritic cells compared to control strains. These studies demonstrate the importance of accessory protein/s involved in sustaining integrity of PG and cell envelope during different phases of Bb infection.