In a previous study (Miller, K.J., Kennedy, E.P. and Reinhold, V.N. (1986) Science 231, 48-51) it was reported that the biosynthesis of periplasmic cyclic beta-1,2-glucans by Agrobacterium tumefaciens is strictly osmoregulated in a pattern closely similar to that found for the membrane-derived oligosaccharides of Escherichia coli (Kennedy, E.P. (1982) Proc. Natl. Acad. Sci. USA 79, 1092-1095). In addition to the well-characterized neutral cyclic glucan, the periplasmic glucans were found to contain an anionic component not previously reported. Biosynthesis of the anionic component is osmotically regulated in a manner indistinguishable from that of the neutral cyclic beta-1,2-glucan. We now find that the anionic component consists of cyclic beta-1,2-glucans substituted with one or more sn-1-phosphoglycerol residues. The presence of sn-1-phosphoglycerol residues represents an additional, striking similarity to the membrane-derived oligosaccharides of E. coli.