Escherichia coli penicillin-binding protein PBP3 is a key element in cell septation. It is presumed to catalyse a transpeptidation reaction during biosynthesis of the septum peptidoglycan but, in vitro, its enzymatic activity has only been demonstrated with thiolester analogues of the natural peptide substrate. It has no detectable transglycosylase activity with lipid II as substrate. This tripartite protein is constructed of an N-terminal membrane anchor-containing module that is essential for cell septation, a non-penicillin-binding (n-PB) module of unknown function and a C-terminal penicillin-binding (PB) module exhibiting all the characteristic motifs of penicilloyl serine transferases. The n-PB module, which is required for the folding and stability of the PB module, may provide recognition sites for other cell division proteins. Initiation of septum formation is not PBP3-dependent but rests on the appearance of the FtsZ ring, and is thus penicillin-insensitive. The control of PBP3 activity during the cell cycle is briefly discussed.