The amp operon, which is located on the Escherichia coli chromosome, modulates the induction of plasmid-borne beta-lactamase genes by extracellular beta-lactam antibiotics. This suggests that the gene products AmpD and AmpE may function in the transduction of external signals. beta-Lactam antibiotics are analogs of cell wall components that can be released during cell wall morphogenesis of enterobacteria. The amp operon was studied to determine its importance in signal transduction during cell wall morphogenesis. The peptidoglycan compositions of amp mutants were determined by high-performance liquid chromatography and fast atom bombardment mass spectrometry. When a chromosomal or plasmid-borne copy of ampD was present, the amount of pentapeptide-containing muropeptides in the cell wall increased upon addition of the cell wall constituent diaminopimelic acid to the growth medium. These results suggest that beta-lactamase induction and modulation of the composition of the cell wall share elements of a regulatory circuit that involves AmpD. Escherichia coli requires AmpD to respond to extracellular signaling amino acids, such as diaminopimelic acid, and this signal transduction system may regulate peptidoglycan composition in response to cell wall turnover products.