YagE is a 33 kDa prophage protein encoded by CP4-6 prophage element in Escherichia coli K12 genome. Here, we report the structures of YagE complexes with pyruvate (PDB Id 3N2X) and KDGal (2-keto-3-deoxy galactonate) (PDB Id 3NEV) at 2.2Å resolution. Pyruvate depletion assay in presence of glyceraldehyde shows that YagE catalyses the aldol condensation of pyruvate and glyceraldehyde. Our results indicate that the biochemical function of YagE is that of a 2-keto-3-deoxy gluconate (KDG) aldolase. Interestingly, E. coli K12 genome lacks an intrinsic KDG aldolase. Moreover, the over-expression of YagE increases cell viability in the presence of certain bactericidal antibiotics, indicating a putative biological role of YagE as a prophage encoded virulence factor enabling the survival of bacteria in the presence of certain antibiotics. The analysis implies a possible mechanism of antibiotic resistance conferred by the over-expression of prophage encoded YagE to E. coli. Proteins 2011, © 2011 Wiley-Liss, Inc.