Transposon Tn1546 confers resistance to glycopeptide antibiotics in enterococci and encodes two D,D-peptidases (VanX and VanY) in addition to the enzymes for the synthesis of D-alanyl-D-lactate (D-Ala-D-Lac). VanY was produced in the baculovirus expression system and purified as a proteolytic fragment that lacked the putative N-terminal membrane anchor of the protein. The enzyme was a Zn2+-dependent D,D-carboxypeptidase that cleaved the C-terminal residue of peptidoglycan precursors ending in R-D-Ala-D-Ala or R-D-Ala-D-Lac but not the dipeptide D-Ala-D-Ala. The specificity constants kcat/Km were 17- to 67-fold higher for substrates ending in the R-D-Ala-D-Ala target of glycopeptides. In Enterococcus faecalis, VanY was present in membrane and cytoplasmic fractions, produced UDP-MurNAc-tetrapeptide from cytoplasmic peptidoglycan precursors and was required for high-level glycopeptide resistance in a medium supplemented with D-Ala. The enzyme could not replace the VanX D,D-dipeptidase for the expression of glycopeptide resistance but a G237D substitution in the host D-Ala:D-Ala ligase restored resistance in a vanX null mutant. Deletion of the membrane anchor of VanY led to an active D,D-carboxypeptidase exclusively located in the cytoplasmic fraction that did not contribute to glycopeptide resistance in a D-Ala-containing medium. Thus, VanX and VanY had non-overlapping functions involving the hydrolysis of D-Ala-D-Ala and the removal of D-Ala from membrane-bound lipid intermediates respectively.