Lipoic acid is the covalently attached cofactor of several multi-component enzyme complexes that catalyze key metabolic reactions. Attachment of lipoic acid to the lipoyl-dependent enzymes is catalyzed by lipoate-protein ligases (LPLs). In Escherichia coli, two distinct enzymes lipoate-protein ligase A (LplA) and lipB-encoded lipoyltransferase (LipB) catalyze independent pathways for lipoylation of the target proteins. The reaction catalyzed by LplA occurs in two steps. First, LplA activates exogenously supplied lipoic acid at the expense of ATP to lipoyl-AMP. Next, it transfers the enzyme-bound lipoyl-AMP to the epsilon-amino group of a specific lysine residue of the lipoyl domain to give an amide linkage. To gain insight into the mechanism of action by LplA, we have determined the crystal structure of Thermoplasma acidophilum LplA in three forms: (i) the apo form; (ii) the ATP complex; and (iii) the lipoyl-AMP complex. The overall fold of LplA bears some resemblance to that of the biotinyl protein ligase module of the E. coli biotin holoenzyme synthetase/bio repressor (BirA). Lipoyl-AMP is bound deeply in the bifurcated pocket of LplA and adopts a U-shaped conformation. Only the phosphate group and part of the ribose sugar of lipoyl-AMP are accessible from the bulk solvent through a tunnel-like passage, whereas the rest of the activated intermediate is completely buried inside the active site pocket. This first view of the activated intermediate bound to LplA allowed us to propose a model of the complexes between Ta LplA and lipoyl domains, thus shedding light on the target protein/lysine residue specificity of LplA.