PM61 is a chain-forming envC strain of Escherichia coli with a leaky outer membrane. It was found to have an oversized penicillin-binding protein 3, which was the result of an IS4 insertion in the prc gene. The other properties of PM61 were caused by the envC mutation. We cloned the envC (yibP) gene and identified the mutation site, causing a single residue substitution, H366Y, in the PM61 envC allele. The gene product was predicted to be a periplasmic protein having coiled-coil structure in the N-terminal region and homology to lysostaphin in the C-terminal region. Overexpression of envC inhibited cell growth, and overexpression of the PM61 mutant allele caused cell lysis. Disruption of the chromosomal envC caused the same defects as the envC point mutation, indicating the gene is dispensable for growth but important for normal septation/separation and cell envelope integrity.