Escherichia coli membrane protein biogenesis is mediated by a signal recognition particle and its membrane-associated receptor (FtsY). Although crucial for its function, it is still not clear how FtsY interacts with the membrane. Analysis of the structure/function differences between severely truncated active (NG+1) and inactive (NG) mutants of FtsY enabled us to identify an essential membrane-interacting determinant. Comparison of the three-dimensional structures of the mutants, combined with site-directed mutagenesis, modeling, and liposome-binding assays, revealed that FtsY contains a conserved autonomous lipid-binding amphipathic alpha-helix at the N-terminal end of the N domain. Deletion experiments showed that this helix is essential for FtsY function in vivo, thus offering, for the first time, clear evidence for the functionally important, physiologically relevant interaction of FtsY with lipids.