Lipid A molecules of certain Gram-negative bacteria, including Salmonella typhimurium and Pseudomonas aeruginosa, may contain secondary S-2-hydroxyacyl chains. S. typhimurium has recently been shown to synthesize its S-2-hydroxymyristate-modified lipid A in a PhoP/PhoQ-dependent manner, suggesting a possible role for the 2-OH group in pathogenesis. We postulated that 2-hydroxylation might be catalyzed by a novel dioxygenase. Lipid A was extracted from a PhoP-constitutive mutant of S. typhimurium grown in the presence or absence of O(2). Under anaerobic conditions, no 2-hydroxymyristate-containing lipid A was formed. Matrix-assisted laser desorption/ionization time-of-flight mass spectrometry of lipid A from cells grown in the presence of (18)O(2) confirmed the direct incorporation of molecular oxygen into 2-hydroxyacyl-modified lipid A. Using several well characterized dioxygenase protein sequences as probes, tBLASTn searches revealed unassigned open reading frame(s) with similarity to mammalian aspartyl/asparaginyl beta-hydroxylases in bacteria known to make 2-hydroxyacylated lipid A molecules. The S. typhimurium aspartyl/asparaginyl beta-hydroxylase homologue (designated lpxO) was cloned into pBluescriptSK and expressed in Escherichia coli K-12, which does not contain lpxO. Analysis of the resulting construct revealed that lpxO expression is sufficient to induce O(2)-dependent formation of 2-hydroxymyristate-modified lipid A in E. coli. LpxO very likely is a novel Fe(2+)/alpha-ketoglutarate-dependent dioxygenase that catalyzes the hydroxylation of lipid A (or of a key precursor). The S. typhimurium lpxO gene encodes a polypeptide of 302 amino acids with predicted membrane-anchoring sequences at both ends. We hypothesize that 2-hydroxymyristate chains released from lipopolysaccharide inside infected macrophages might be converted to 2-hydroxymyristoyl coenzyme A, a well characterized, potent inhibitor of protein N-myristoyl transferase.