In Escherichia coli , the bifunctional penicillin-binding proteins (PBPs), PBP1A and PBP1B, play critical roles in the final stage of peptidoglycan (PG) biosynthesis. These synthetic enzymes each possess a PG glycosyltransferase (PGT) domain and a transpeptidase (TP) domain. Recent genetic experiments have shown that PBP1A and PBP1B each require an outer membrane lipoprotein, LpoA and LpoB, respectively, to function properly in vivo. Here, we use complementary assays to show that LpoA and LpoB each increase the PGT and TP activities of their cognate PBPs, albeit by different mechanisms. LpoA directly increases the rate of the PBP1A TP reaction, which also results in enhanced PGT activity; in contrast, LpoB directly affects PGT domain activity, resulting in enhanced TP activity. These studies demonstrate bidirectional coupling of PGT and TP domain function. Additionally, the transpeptidation assay described here can be applied to study other activators or inhibitors of the TP domain of PBPs, which are validated drug targets.