An internal 630-bp DNA fragment of the gene encoding penicillin-binding protein 3 (PBP 3) (dacA) of Streptococcus pneumoniae was identified in a lambda gt11 gene bank screened with anti-PBP 3 antiserum. The deduced 210-amino-acid sequence showed a high degree of homology to the low-molecular-weight PBPs 5 and 6 of Escherichia coli and Bacillus subtilis PBP 5. Viable mutants lacking a C-terminal part of PBP 3 were obtained after a plasmid containing the dacA fragment was integrated into the PBP 3 gene by homologous recombination. The truncated PBP 3* was still active in terms of beta-lactam binding. Most PBP 3 was found in the growth medium, indicating that membrane anchoring of PBP 3 is provided by the C terminus, as has been shown for other D,D-carboxypeptidases. The mutant cells grew with a slower generation time than the wild type in the shape of irregular enlarged spheres. In addition, as revealed by electron microscopy, cell separation was severely affected, septa were found unevenly distributed at multiple sites within the cells, and the murein layer appeared variable in thickness.