Gram-negative bacterial cell envelope consists of a surface-exposed lipid bilayer (outer membrane or OM) that serves as a permeability barrier to maintain the cellular integrity. Beneath the OM is the periplasmic space that harbours peptidoglycan (PG), a highly cross-linked mesh-like glycan polymer closely encasing the inner membrane (IM). During growth of a bacterium balanced synthesis of the envelope components is required to maintain the cellular integrity, of which little is known. In this study, we identify sanA, an ORF of unknown function encoding a predicted IM-anchored protein as a factor contributing to balanced synthesis of PG in E. coli. Absence of SanA increased the rate of nascent PG strand incorporation, and restored growth and viability to several mutants defective in either cell division or cell elongation. Detailed mutant analysis of sanA showed that it is defective in the envelope barrier properties. Interestingly, overexpression of the periplasmic endopeptidases that cleave the cross-links of the PG mesh was able to alleviate the phenotypes of sanA mutant implying the envelope defects are due to alterations in the PG sacculus. Additionally, a SanA variant (SSDsbA-SanA) targeted to the periplasm, complemented the SanA- phenotypes suggesting it functions in the periplasmic phase of the PG synthesis. Further, we find that SanA functions independently of its paralog, ElyC, known to regulate the synthesis of enterobacterial common antigen (ECA), a surface polysaccharide found in the cell envelopes of most enteric bacteria. Overall, our results suggest a role for SanA in the maintenance of optimal PG synthesis, providing evidence for the existence of an additional layer of regulation in Gram-negative cell envelope biogenesis.