Penicillin-binding proteins (PBPs) are enzymes involved in the assembly of the bacterial cell wall, a major target for antibiotics. These proteins are classified by mass into high-molecular-weight PBPs, which are transpeptidases that form peptidoglycan cross-links, and low-molecular-weight PBPs, which are typically hydrolases. We report a functionally unique family of low-molecular-weight PBPs that act as transpeptidases rather than hydrolases, but they do not cross-link peptidoglycan. We show that these PBPs can exchange D-amino acids bearing chemical tags or affinity handles into peptidoglycan precursors, including Lipid II, enabling biochemical studies of proteins involved in cell wall assembly. We report that, in two organisms, the PBPs incorporate lysine into cellular peptidoglycan and that, further, the PBPs have the unprecedented ability to transfer the primary epsilon-amine of lysine to peptidoglycan.