Acylation of diverse carbohydrates occurs across all domains of life and can be catalysed by proteins with a membrane bound acyltransferase-3 (AT3) domain (PF01757). In bacteria, these proteins are essential in processes including symbiosis, resistance to viruses and antimicrobials, and biosynthesis of antibiotics, yet their structure and mechanism are largely unknown. In this study, evolutionary co-variance analysis was used to build a computational model of the structure of a bacterial O-antigen modifying acetyltransferase, OafB. The resulting structure exhibited a novel fold for the AT3 domain, which molecular dynamics simulations demonstrated is stable in the membrane. The AT3 domain contains 10 transmembrane helices arranged to form a large cytoplasmic cavity lined by residues known to be essential for function. Further molecular dynamics simulations support a model where the acyl-coA donor spans the membrane through accessing a pore created by movement of an important loop capping the inner cavity, enabling OafB to present the acetyl group close to the likely catalytic resides on the extracytoplasmic surface. Limited but important interactions with the fused SGNH domain in OafB are identified, and modelling suggests this domain is mobile and can both accept acyl-groups from the AT3 and then reach beyond the membrane to reach acceptor substrates. Together this new general model of AT3 function provides a framework for the development of inhibitors that could abrogate critical functions of bacterial pathogens.