Several integral membrane proteins exhibiting undecaprenyl-pyrophosphate (C55-PP) phosphatase activity were previously identified in Escherichia coli that belonged to two distinct protein families: the BacA protein, which accounts for 75% of the C55-PP phosphatase activity detected in E. coli cell membranes, and three members of the PAP2 phosphatidic acid phosphatase family, namely PgpB, YbjG and LpxT. This dephosphorylation step is required to provide the C55-P carrier lipid which plays a central role in the biosynthesis of various cell wall polymers. We here report detailed investigations of the biochemical properties and membrane topology of the BacA protein. Optimal activity conditions were determined and a narrow-range substrate specificity with a clear preference for C55-PP was observed for this enzyme. Alignments of BacA protein sequences revealed two particularly well-conserved regions and several invariant residues whose role in enzyme activity was questioned by using a site-directed mutagenesis approach and complementary in vitro and in vivo activity assays. Three essential residues Glu21, Ser27, and Arg174 were identified, allowing us to propose a catalytic mechanism for this enzyme. The membrane topology of the BacA protein determined here experimentally did not validate previous program-based predicted models. It comprises seven transmembrane segments and contains in particular two large periplasmic loops carrying the highly-conserved active site residues. Our data thus provide evidence that all the different E. coli C55-PP phosphatases identified to date (BacA and PAP2) catalyze the dephosphorylation of C55-PP molecules on the same (outer) side of the plasma membrane.