Cell free extracts of E. coli B were found to catalyse the conversion of phosphatidyl glycerol to acylphosphatidyl glycerol (semilysobis phosphatidic acid). It has been found that phosphatidyl glycerol acted both as an acyl acceptor and a donor. Phosphatidyl ethanolamine was also found to be a good acyl donor. These results are explained by an internal and external transacylation reaction.