beta-Ketoacyl-acyl carrier protein (ACP) synthase III (KAS III, also called acetoacetyl-ACP synthase) encoded by the fabH gene is thought to catalyze the first elongation reaction (Claisen condensation) of type II fatty acid synthesis in bacteria and plant plastids. However, direct in vivo evidence that KAS III catalyzes an essential reaction is lacking, because no mutant organism deficient in this activity has been isolated. We report the first bacterial strain lacking KAS III, a fabH mutant constructed in the Gram-positive bacterium Lactococcus lactis subspecies lactis IL1403. The mutant strain carries an in-frame deletion of the KAS III active site region and was isolated by gene replacement using a medium supplemented with a source of saturated and unsaturated long-chain fatty acids. The mutant strain is devoid of KAS III activity and fails to grow in the absence of supplementation with exogenous long-chain fatty acids demonstrating that KAS III plays an essential role in cellular metabolism. However, the L. lactis fabH deletion mutant requires only long-chain unsaturated fatty acids for growth, a source of long-chain saturated fatty acids is not required. Because both saturated and unsaturated fatty acids are required for growth when fatty acid synthesis is blocked by biotin starvation (which prevents the synthesis of malonyl-CoA), another pathway for saturated fatty acid synthesis must remain in the fabH deletion strain. Indeed, incorporation of [1-14C]acetate into fatty acids in vivo showed that the fabH mutant retained about 10% of the fatty acid synthetic ability of the wild-type strain and that this residual synthetic capacity was preferentially diverted to the saturated branch of the pathway. Moreover, mass spectrometry showed that the fabH mutant retained low levels of palmitic acid upon fatty acid starvation. Derivatives of the fabH deletion mutant strain were isolated that were octanoic acid auxotrophs consistent with biochemical studies indicating that the major role of FabH is production of short-chain fatty acid primers. We also confirmed the essentiality of FabH in Escherichia coli by use of a plasmid-based gene insertion/deletion system. Together these results provide the first genetic evidence demonstrating that FabH conducts the major condensation reaction in the initiation of type II fatty acid biosynthesis in both Gram-positive and Gram-negative bacteria.