Escherichia coli strain SM101 harbors a temperature-sensitive allele (lpxA2) of the gene encoding UDP-Glc-NAc acyltransferase (the first enzyme of the lipid A pathway). SM101 is temperature-sensitive for lipid A biosynthesis and growth. To determine whether or not E. coli mutants lacking lipid A can be isolated, we examined temperature-resistant revertants of SM101. All regained the ability to synthesize lipid A. However, some were not true revertants but had acquired mutations in a neighboring gene (orf17), while retaining the original lpxA2 lesion. Cell extracts of such revertants displayed 2-5 fold reductions in the specific activity of (3R)-hydroxymyristoyl-ACP dehydrase. Wild-type cells that overproduced the protein encoded by orf17 overproduced (3R)-hydroxymyristoyl-ACP dehydrase activity as much as 170-fold, suggesting that orf17 is the structural gene for the dehydrase. The proposed function of orf17 is further supported by its sequence similarity to fabA, the structural gene for (3R)-hydroxydecanoyl dehydrase of E. coli. We suggest that bypass of the lpxA2 phenotype by mutations in orf17 may be due to an increased (3R)-hydroxymyristoyl-ACP pool. The orf17 gene (which we now designate fabZ) is not regulated by fadR. However, orf17 may be related to sefA, a suppressor of certain lesions in the cell division/lipid A biosynthesis gene, envA.