Catalyzes cross-linking of the peptidoglycan cell wall at the division septum. Preferential cleavage: (Ac)2-L-Lys-D-Ala-|-D-Ala. Also transpeptidation of peptidyl-alanyl moieties that are N-acyl substituents of D-alanine. Cell wall biogenesis; peptidoglycan biosynthesis. The enzyme has an N-terminal penicillin insensitive transglycosylase domain (formation of linear glycan strands) and a C-terminal penicillin-sensitive transpeptidase domain (cross-linking of the peptide subunits). This protein was sequenced in penicillin-sensitive strains LM306, and FA19, and in penicillin-resistant strains CDC84-060384, CDC84-060418 and CDC77-124615. The sequence shown is that of strain LM306. Belongs to the transpeptidase family. FtsI subfamily.