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Abstract Background The aggressive spread of Liberibacter asiaticus, a bacterium closely associated with citrus greening, has given rise to an acute crisis in the citrus industry, making it imperative to expand the scientific knowledge base regarding L. asiaticus. Despite several endeavors to culture L. asiaticus, this bacterium has yet to be maintained in axenic culture, rendering identification and analysis of potential treatment targets challenging. Accordingly, a thorough understanding of biological mechanisms involved in the citrus host-microbe relationship is critical as a means of directing the search for future treatment targets. In this study, we evaluate the biochemical characteristics of CLIBASIA_01175, renamed LdtP (L,D-transpeptidase). Surrogate strains were used to evaluate its potential biological significance in gram-negative bacteria. A strain of E. coli carrying quintuple knock-outs of all genes encoding L,D-transpeptidases was utilized to demonstrate the activity of L. asiaticus LdtP. Results This complementation study demonstrated the periplasmic localization of mature LdtP and provided evidence for the biological role of LdtP in peptidoglycan modification. Further investigation highlighted the role of LdtP as a periplasmic esterase involved in modification of the lipid A moiety of the lipopolysaccharide. This work described, for the first time, an enzyme of the L,D-transpeptidase family with moonlighting enzyme activity directed to the modification of the bacterial cell wall and LPS. Conclusions Taken together, the data indicates that LdtP is a novel protein involved in an alternative pathway for modification of the bacterial cell, potentially affording L. asiaticus a means to survive within the host.