During division of Gram-negative bacteria, invagination of the cytoplasmic membrane and inward growth of the peptidoglycan (PG) are followed by the cleavage of connective septal PG to allow cell separation. This PG splitting process requires temporal and spatial regulation of cell wall hydrolases. In Escherichia coli, LytM factors play an important role in PG splitting. Here we identify and characterize a member of this family (DipM) in Caulobacter crescentus. Unlike its E. coli counterparts, DipM is essential for viability under fast-growth conditions. Under slow-growth conditions, the DeltadipM mutant displays severe defects in cell division and FtsZ constriction. Consistent with its function in division, DipM colocalizes with the FtsZ ring during the cell cycle. Mutagenesis suggests that the LytM domain of DipM is essential for protein function, despite being non-canonical. DipM also carries two tandems of the PG-binding LysM domain that are sufficient for FtsZ ring localization. Localization and fluorescence recovery after photobleaching microscopy experiments suggest that DipM localization is mediated, at least in part, by the ability of the LysM tandems to distinguish septal, multilayered PG from non-septal, monolayered PG.