Modification of specific Gram-negative bacterial cell envelope components, such as capsule, O-antigen and lipid A, are often essential for the successful establishment of infection. Francisella species express lipid A molecules with unique characteristics involved in circumventing host defences, which significantly contribute to their virulence. In this study, we show that NaxD, a member of the highly conserved YdjC superfamily, is a deacetylase required for an important modification of the outer membrane component lipid A in Francisella. Mass spectrometry analysis revealed that NaxD is essential for the modification of a lipid A phosphate with galactosamine in Francisella novicida, a model organism for the study of highly virulent Francisella tularensis. Significantly, enzymatic assays confirmed that this protein is necessary for deacetylation of its substrate. In addition, NaxD was involved in resistance to the antimicrobial peptide polymyxin B and critical for replication in macrophages and in vivo virulence. Importantly, this protein is also required for lipid A modification in F. tularensis as well as Bordetella bronchiseptica. Since NaxD homologues are conserved among many Gram-negative pathogens, this work has broad implications for our understanding of host subversion mechanisms of other virulent bacteria.