Many of the genes for lipopolysaccharide (LPS) biosynthesis in Haemophilus influenzae are phase variable. The mechanism of this variable expression involves slippage of tetranucleotide repeats located within the reading frame of these genes. Based on this, we hypothesized that tetranucleotide repeat sequences might be used to identify as yet unrecognized LPS biosynthetic genes. Synthetic oligonucleotides (20 bases), representing all previously reported LPS-related tetranucleotide repeat sequences in H. influenzae, were used to probe a collection of 25 genetically and epidemiologically diverse strains of non-typeable H. influenzae. A novel gene identified through this strategy was a homologue of oafA, a putative O-antigen LPS acetylase of Salmonella typhimurium, that was present in all 25 non-typeable H. influenzae, 19 of which contained multiple copies of the tetranucleotide 5'-GCAA. Using lacZ fusions, we showed that these tetranucleotide repeats could mediate phase variation of this gene. Structural analysis of LPS showed that a major site of acetylation was the distal heptose (HepIII) of the LPS inner-core. An oafA deletion mutant showed absence of O-acetylation of HepIII. When compared with wild type, oafA mutants displayed increased susceptibility to complement-mediated killing by human serum, evidence that O-acetylation of LPS facilitates resistance to host immune clearance mechanisms. These results provide genetic and structural evidence that H. influenzae oafA is required for phase variable O-acetylation of LPS and functional evidence to support the role of O-acetylation of LPS in pathogenesis.