A working structural model of penicillin-binding protein 1B (PBP 1B) from Escherichia coli derived from previous data consists of a highly charged aminoterminal cytoplasmic tail, a 23-amino-acid hydrophobic transmembrane anchor, and a 758-amino-acid periplasmic domain. Using an engineered thrombin cleavage site, we have investigated the solubility properties of the periplasmic domain of PBP 1B. Twelve amino acids, comprised of the consensus thrombin cleavage site (LVPR decreases GS) and flanking glycine residues, were inserted into PBP 1B just past its putative transmembrane segment. To aid in purification, a hexa-histidine tag was also inserted at its amino terminus, and the engineered protein (PBP 1B-GT/H6) was purified and characterized. Inclusion of the thrombin cleavage site had no effect on the protein's intrinsic tryptophan fluorescence and affinity for [14C]penicillin G, indicating that the protein structure was not significantly perturbed. PBP 1B-GT/H6 was readily cleaved by thrombin at low thrombin/protein ratios to a protein with properties consistent with the removal of its cytoplasmic tail and transmembrane regions. Cleavage of the protein was dependent upon the presence of the thrombin cleavage site, and the thrombin-cleaved protein (PBP 1Bper) displayed an identical affinity for [14C] penicillin G binding as wild-type PBP 1B and uncleaved PBP 1B-GT/H6. [14C]Penicillin G-labeled PBP 1Bper eluted from a gel filtration column in the presence but not in the absence of 0.7% 3-[(3-cholamidopropyl)dimethylammonio]-1- propanesulfonic acid, and PBP 1Bper was found entirely in the membrane fraction of a thrombin digest of membranes containing overproduced PBP 1B-GT/H6. To further characterize this unusual solubility behavior, purified PBP 1Bper was reconstituted into lipid vesicles, which were then floated on a sucrose gradient. Floated vesicles contained > 95% of total 125I-penicillin V binding, indicating that PBP 1Bper directly associates with lipid membranes. These results strongly suggest that the periplasmic domain of PBP 1B associates with membranes independent of its amino terminal transmembrane region.