Essential cell division protein that catalyzes cross-linking of the peptidoglycan cell wall at the division septum (PubMed:1103132, PubMed:6450748, PubMed:9614966, PubMed:3531167, PubMed:7030331). Required for localization of FtsN (PubMed:9282742). Preferential cleavage: (Ac)2-L-Lys-D-Ala-|-D-Ala. Also transpeptidation of peptidyl-alanyl moieties that are N-acyl substituents of D-alanine. Inhibited by beta-lactam antibiotics such as penicillin, moenomycin, macarbomycin, furazlocillin and piperacillin. Antibiotics inhibit the activity by binding to the catalytic serine. Cell wall biogenesis; peptidoglycan biosynthesis. Homodimer (PubMed:20847002). Forms a complex with FtsW (PubMed:20847002). Interacts with FtsQ (PubMed:17185541). The bulk of the molecule, except for the N-terminal membrane anchor region, protrudes into the periplasmic space (PubMed:2677607, PubMed:9614966). Localizes to the division septum during the later stages of cell growth and throughout septation (PubMed:9379897, PubMed:9603865, PubMed:9882665, PubMed:15601716). Localization is dependent on FtsZ, FtsA, FtsK, FtsQ, FtsL and FtsW, but not on FtsN (PubMed:9603865, PubMed:9882665, PubMed:11703663, PubMed:11807049). Contains an N-terminal membrane anchor-containing module, a central non-catalytic domain and a C-terminal penicillin-binding (PB) catalytic domain. The transmembrane region is essential for localization to the septal ring, interaction with FtsW and cell septation. Belongs to the transpeptidase family. FtsI subfamily. Was originally thought to be a bifunctional enzyme with transglycosylase and transpeptidase activities.