We have shown previously that the periplasmic domain of penicillin-binding protein 1B (PBP 1Bper; residues 90-844) from Escherichia coli is insoluble in the absence of detergents, and can be reconstituted into liposomes [Nicholas, Lamson and Schultz (1993) J. Biol. Chem. 268, 5632-5641]. These data suggested that native PBP 1B contains a membrane association site in addition to its N-terminal transmembrane anchor. We have studied the membrane topology of PBP 1B in greater detail by assessing detergent binding and solubility in the absence of detergents for PBP 1Bper and a set of proteolytic fragments of PBP 1B. PBP 1Bper was shown by three independent methods to bind to detergent micelles, which strongly suggests that the periplasmic domain interacts with the hydrophobic milieu of membrane bilayers. Digestion with high weight ratios of thrombin of purified PBP 1B containing an engineered thrombin cleavage site on the periplasmic side of the transmembrane anchor generated four fragments in addition to PBP 1Bper that varied in size from 71 to 48 kDa. In contrast to PBP 1Bper, all fragments of 67 kDa and smaller were eluted from a gel-filtration column in the absence of detergents and did not bind to detergent micelles. The N-terminal sequences of the four fragments were determined, allowing the cleavage sites to be located in the primary sequence of PBP 1B. These data localize the membrane association site of PBP 1B to a region comprising the first 163 amino acids of the periplasmic domain, which falls within the putative transglycosylase domain. Lipid modification does not appear to be the mechanism by which PBP 1Bper associates with membranes.