Leader peptidase is an integral membrane protein of E. coli and it catalyses the removal of most signal peptides from translocated precursor proteins. In this study it is shown that when the transmembrane anchors are removed in vivo, the remaining catalytic domain can bind to inner and outer membranes of E. coli. Furthermore, the purified catalytic domain binds to inner membrane vesicles and vesicles composed of purified inner membrane lipids with comparable efficiency. It is shown that the interaction is caused by penetration of a part of the catalytic domain between the lipids. Penetration is mediated by phosphatidylethanolamine, the most abundant lipid in E. coli, and does not seem to depend on electrostatic interactions. A hydrophobic segment around the catalytically important residue serine 90 is required for the interaction with membranes.