Ubiquitous PAP2 lipid phosphatases are involved in a wide array of central physiological functions. PgpB from Escherichia coli constitutes the archetype of this subfamily of membrane proteins. It displays a dual function by catalyzing the biosynthesis of two essential lipids, the phosphatidylglycerol (PG) and the undecaprenyl phosphate (C55-P). C55-P constitutes a lipid carrier allowing the translocation of peptidoglycan subunits across the plasma membrane. PG and C55-P are synthesized in a redundant manner by PgpB and other PAP2 and/or unrelated membrane phosphatases. Here, we show that PgpB is the sole, among these multiple phosphatases, displaying this dual activity. The inactivation of PgpB does not confer any apparent growth defect, but its inactivation together with another PAP2 alters the cell envelope integrity increasing the susceptibility to small hydrophobic compounds. Evidence is also provided of an interplay between PAP2s and the peptidoglycan polymerase PBP1A. In contrast to PGP hydrolysis, which relies on a His/Asp/His catalytic triad of PgpB, the mechanism of C55-PP hydrolysis appeared as only requiring the His/Asp diad, which led us to hypothesize distinct processes. Moreover, thermal stability analyses highlighted a substantial structural change upon phosphate binding by PgpB, supporting an induced-fit model of action.