The crystal structure at 2.16 Å resolution of the full-length bacterial bifunctional transglycosylase penicillin-binding protein 1b (PBP1b) from Escherichia coli, in complex with its inhibitor moenomycin, is provided. The atomic coordinates of the complex as well as the moenomycin binding site are provided. Three dimensional structures of amino acid residues involved in moenomycin binding and transglycosylation activity are identified. Binding site for peptidoglycan synthesis inhibitors comprising inhibitor-binding site comprises amino acid residues from at least one of transglycosylase (TG), UvrB domain 2 homolog (UB2H) and transmembrane (TM) domains of PBP1b are identified at an atomic level of resolution. Methods for rational drug design based on the atomic coordinates are provided. Methods for screening for antibiotics based on anisotropic binding assay and transglycosylase inhibitor assays are provided. Novel antibiotics based on the screening assays of the invention are disclosed.