Lysates of induced E. coli (lambda) lysogens contain two enzymes acting on murein: endopeptidase and murein transglycosylase. The transglycosylase was separated from the endopeptidase and purified to homogeneity. Its bacteriolytic activity was 200-fold higher than of hen egg lysozyme. The bacteriolytic activity of the lysate depends on the presence of the enzyme. The endopeptidase alone not lyse the cells, but it enhances the extent of lysis. The properties of the transglycosylase (molecular weight 17 500, pH optimum at 6.6, inactivation by Zn2+), show that it is entirely different from the bacterial enzyme of the same specificity described by others. Data are presented, which suggest that this enzyme is the phage lambda R-gene product.