Photorhabdus is a genus of gram-negative Enterobacteriaceae that is pathogenic to insect larvae while also maintaining a mutualistic relationship with nematodes from the family Heterorhabditis, where the bacteria occupy the gut of the infective juvenile (IJ) stage of the nematode. In this study we describe the identification and characterization of a mutation in the pbgE1 gene of Photorhabdus luminescens TT01, predicted to be the fifth gene in the pbgPE operon. We show that this mutant, BMM305, is strongly attenuated in virulence against larvae of the greater wax moth, Galleria mellonella, and we report that BMM305 is more sensitive to the cationic antimicrobial peptide, polymyxin B, and growth in mildly acidic pH than the parental strain of P. luminescens. Moreover, we also show that the lipopolysaccharide (LPS) present on the surface of BMM305 does not appear to contain any O antigen. Complementation studies reveal that the increased sensitivity to polymyxin B and growth in mildly acidic pH can be rescued by the in trans expression of pbgE1, while the defects in O-antigen assembly and pathogenicity require the in trans expression of pbgE1 and the downstream genes pbgE2 and pbgE3. Finally, we show that BMM305 is defective in symbiosis as this mutant is unable to colonize the gut of the IJ stage of the nematode. Therefore, we conclude that the pbgPE operon is required for both pathogenicity and symbiosis in P. luminescens.