Bacteria are protected by a polymer of peptidoglycan that serves as an exoskeleton. In Staphylococcus aureus, the enzymes that assemble peptidoglycan move during the cell cycle from the periphery, where they are active during growth, to the division site where they build the partition between daughter cells. But how peptidoglycan synthesis is regulated throughout the cell cycle is not understood. Here we identify a membrane protein complex that spatially regulates S. aureus peptidoglycan synthesis. This complex consists of an amidase that removes peptide chains from uncrosslinked peptidoglycan and a partner protein that controls its activity. Typical amidases act after cell division to hydrolyze peptidoglycan between daughter cells so they can separate. However, we show that this amidase controls cell growth. In its absence, excess peptidoglycan synthesis occurs at the cell periphery, causing cells to grow so large that cell division is defective. We show that cell growth and division defects due to loss of this amidase can be mitigated by attenuating the polymerase activity of the major S. aureus peptidoglycan synthase. Our findings lead to a model wherein the amidase complex regulates the density of peptidoglycan assembly sites to control peptidoglycan synthase activity at a given cellular location. Removal of peptide chains from peptidoglycan at the cell periphery promotes synthase movement to midcell during cell division. This mechanism ensures that cell expansion is properly coordinated with cell division.