The lytic transglycosylases cleave the bacterial cell wall heteropolymer peptidoglycan with the same specificity as the muramidases (lysozymes), between the N‐acetylmuramic acid and N‐acetylglucosamine residues, with the concomitant formation of a 1,6‐anhydromuramoyl residue. The putative catalytic residue in the family 3 lytic transglycosylase from Pseudomonas aeruginosa, Glu162 as identified by sequence alignment to the homologous enzyme from Escherichia coli, was replaced with both Ala and Asp by site‐directed mutagenesis. Neither mutant enzyme differed structurally from the wild‐type enzyme, as judged by CD spectroscopy, but both were enzymatically inactive confirming the essential role of Glu162 in the mechanism of action of this lytic transglycosylase. The β‐hexosaminidase inhibitor NAG‐thiazoline was shown to inhibit the activity of lytic transglycosylase activity, thus providing the first direct evidence that the formation of the 1,6‐anhydromuramoyl residue may proceed through an oxazolinium ion intermediate involving anchimeric assistance. Using surface plasmon resonance and difference absorbance spectroscopy, K d values of 1.8 and 1.4 mM, respectively, were determined for NAG thiazoline, while its parent compound N‐acetylglucosamine neither inhibited nor appeared to bind the lytic transglycosylase with any significant affinity.