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The peptidoglycan (PG) layer is a critical component of the bacterial cell wall and serves as an important target for antibiotics in both gram-negative and gram-positive bacteria. The hydrolysis of septal PG (sPG) is a crucial step of bacterial cell division, facilitated by FtsEX through an amidase activation system. In this study, we present the cryo-EM structures of Escherichia coli FtsEX and FtsEX-EnvC in the ATP-bound state at resolutions of 3.05 Å and 3.11 Å, respectively. Our PG degradation assays in E. coli reveal that the ATP-bound conformation of FtsEX activates sPG hydrolysis of EnvC-AmiB, whereas EnvC-AmiB alone exhibits autoinhibition. Structural analyses indicate that ATP binding induces conformational changes in FtsEX-EnvC, leading to significant differences from the apo state. Furthermore, PG degradation assays of AmiB mutants confirm that the regulation of AmiB by FtsEX-EnvC is achieved through the interaction between EnvC-AmiB. These findings not only provide structural insight into the mechanism of sPG hydrolysis and bacterial cell division, but also have implications for the development of novel therapeutics targeting drug-resistant bacteria.