Biofilms are dense microbial communities. Although widely distributed and medically important, how biofilm cells interact with one another is poorly understood. Recently, we described a novel process whereby myxobacterial biofilm cells exchange their outer membrane (OM) lipoproteins. For the first time we report here the identification of two host proteins, TraAB, required for transfer. These proteins are predicted to localize in the cell envelope; and TraA encodes a distant PA14 lectin-like domain, a cysteine-rich tandem repeat region, and a putative C-terminal protein sorting tag named MYXO-CTERM, while TraB encodes an OmpA-like domain. Importantly, TraAB are required in donors and recipients, suggesting bidirectional transfer. By use of a lipophilic fluorescent dye, we also discovered that OM lipids are exchanged. Similar to lipoproteins, dye transfer requires TraAB function, gliding motility and a structured biofilm. Importantly, OM exchange was found to regulate swarming and development behaviors, suggesting a new role in cell-cell communication. A working model proposes TraA is a cell surface receptor that mediates cell-cell adhesion for OM fusion, in which lipoproteins/lipids are transferred by lateral diffusion. We further hypothesize that cell contact-dependent exchange helps myxobacteria to coordinate their social behaviors.