Cells of eukaryotic or prokaryotic origin express proteins with LysM domains that associate with the cell wall envelope of bacteria. The molecular properties that enable LysM domains to interact with microbial cell walls are not yet established. Staphylococcus aureus, a spherical microbe, secretes two murein hydrolases with LysM domains, Sle1 and LytN. We show here that the LysM domains of Sle1 and LytN direct murein hydrolases to the staphylococcal envelope in the vicinity of the cross-wall, the mid-cell compartment for peptidoglycan synthesis. LysM domains associate with the repeating disaccharide β-N-acetylmuramic acid, (1→4)-β-N-acetylglucosamine of staphylococcal peptidoglycan. Modification of N-acetylmuramic acid with wall teichoic acid, a ribitol-phosphate polymer tethered to murein linkage units, prevents the LysM domain from binding to peptidoglycan. The localization of LytN and Sle1 to the cross-wall is abolished in staphylococcal tagO mutants, which are defective for wall teichoic acid synthesis. We propose a model whereby the LysM domain ensures septal localization of LytN and Sle1 followed by processive cleavage of peptidoglycan, thereby exposing new LysM binding sites in the cross-wall and separating bacterial cells.