Assembly of the division septum in bacteria is mediated by several proteins that localize to the division site. One of these, FtsI (also called penicillin-binding protein 3) of Escherichia coli, consists of a short cytoplasmic domain, a single membrane-spanning segment, and a large periplasmic domain that encodes a transpeptidase activity involved in synthesis of septal peptidoglycan. We have constructed a merodiploid strain with a wild-type copy of ftsI at the normal chromosomal locus and a genetic fusion of ftsI to the green fluorescent protein (gfp) at the lambda attachment site. gfp-ftsI was expressed at physiologically appropriate levels under control of a regulatable promoter. Consistent with previous results based on immunofluorescence microscopy GFP-FtsI localized to the division site during the later stages of cell growth and throughout septation. Localization of GFP-FtsI to the cell pole(s) was not observed unless the protein was overproduced about 10-fold. Membrane anchor alterations shown previously to impair division but not membrane insertion or transpeptidase activity were found to interfere with localization of GFP-FtsI to the division site. In contrast, GFP-FtsI localized well in the presence of beta-lactam antibiotics that inhibit the transpeptidase activity of FtsI. Septal localization depended upon every other division protein tested (FtsZ, FtsA, FtsQ, and FtsL). We conclude that FtsI is a late recruit to the division site, and that its localization depends on an intact membrane anchor.