The bacterial actin homologue MreB plays a key role in cell morphogenesis. In Bacillus subtilis MreB is essential under normal growth conditions and mreB mutants are defective in the control of cell diameter. However, the precise role of MreB is still unclear. Analysis of the lethal phenotypic consequences of mreB disruption revealed an unusual bulging phenotype that precedes cell death. A similar phenotype was seen in wild-type cells at very low Mg2+ concentrations. We found that inactivation of the major bi-functional penicillin-binding protein (PBP) PBP1 of B. subtilis restored the viability of an mreB null mutant as well as preventing bulging in both mutant and wild-type backgrounds. Bulging was associated with delocalization of PBP1. We show that the normal pattern of localization of PBP1 is dependent on MreB and that the proteins can physically interact using in vivo pull-down and bacterial two-hybrid approaches. Interactions between MreB and several other PBPs were also detected. Our results suggest that MreB filaments associate directly with the peptidoglycan biosynthetic machinery in B. subtilis as part of the mechanism that brings about controlled cell elongation.