The proteinaceous inhibitor of vertebrate lysozymes (Ivy) is produced by a collection of Gram-negative bacteria as a stress response to damage to their essential cell wall component peptidoglycan. A paralog of Ivy, Ivyp2 is produced exclusively by a number of pseudomonads, including Pseudomonas aeruginosa, but this protein does not inhibit the lysozymes, and its function was unknown. In this study, we demonstrate that the production of Ivy (homologs of both Ivyp1 and Ivyp2) correlates with bacteria that do not O-acetylate their peptidoglycan, a modification that controls the activity of the lytic transglycosylases. Furthermore, we show that both Ivy proteins are potent inhibitors of the lytic transglycoslyases, enzymes involved in the biosynthesis and maintenance of peptidoglycan. These data suggest that the true physiological function of the Ivy proteins is to control the autolytic activity of lytic transglycosylases within the periplasm of Gram-negative bacteria that do not produce O-acetylated peptidoglycan and that the inhibition of exogenous lysozyme by Ivy is simply a fortuitous coincidence.