Peptidoglycan (PG) is an essential component of the bacterial cell wall that maintains the shape and integrity of the cell. The PG precursor lipid II is assembled at the inner leaflet of the cytoplasmic membrane, translocated to the periplasmic side, and polymerized to glycan chains by membrane anchored PG synthases, such as the class A Penicillin-binding proteins (PBPs). Polymerization of PG releases the diphosphate form of the carrier lipid, undecaprenyl pyrophosphate (C55-PP), which is converted to the monophosphate form by membrane-embedded pyrophosphatases, generating C55-P for a new round of PG precursor synthesis. Here we report that deletion of the C55-PP pyrophosphatase gene pgpB in E. coli increases the susceptibility to cefsulodin, a β-lactam specific for PBP1A, indicating that the cellular function of PBP1B is impaired in the absence of PgpB. Purified PBP1B interacted with PgpB and another C55-PP pyrophosphatase, BacA and both, PgpB and BacA stimulated the glycosyltransferase activity of PBP1B. C55-PP was found to be a potent inhibitor of PBP1B. Our data suggest that the stimulation of PBP1B by PgpB is due to the faster removal and processing of C55-PP, and that PBP1B interacts with C55-PP phosphatases during PG synthesis to couple PG polymerization with the recycling of the carrier lipid and prevent product inhibition by C55-PP.