Bacterial cells are fortified against osmotic lysis by a cell wall made of peptidoglycan (PG). Synthases called penicillin-binding proteins (PBPs), the targets of penicillin and related antibiotics, polymerize the glycan strands of PG and crosslink them into the cell wall meshwork via attached peptides. The average length of glycan chains inserted into the matrix by the PBPs is thought to play an important role in bacterial morphogenesis, but polymerization termination factors controlling this process have yet to be discovered. Here, we report the identification of Escherichia coli MltG (YceG) as a potential terminase for glycan polymerization that is broadly conserved in bacteria. A clone containing mltG was initially isolated in a screen for multicopy plasmids generating a lethal phenotype in cells defective for the PG synthase PBP1b. Biochemical studies revealed that MltG is an inner membrane enzyme with endolytic transglycosylase activity capable of cleaving at internal positions within a glycan polymer. Radiolabeling experiments further demonstrated MltG-dependent nascent PG processing in vivo, and bacterial two-hybrid analysis identified an MltG-PBP1b interaction. Mutants lacking MltG were also shown to have longer glycans in their PG relative to wild-type cells. Our combined results are thus consistent with a model in which MltG associates with PG synthetic complexes to cleave nascent polymers and terminate their elongation.