Recent advances in the study of bacterial membranes have led to the identification of a multicomponent YaeT complex in the outer membrane (OM) of Gram-negative bacteria that is involved in the targeting and folding of beta-barrel outer membrane proteins (OMPs). In Escherichia coli, this complex consists of an essential OMP, YaeT, and three OM lipoproteins, YfgL, NlpB and YfiO. YfiO is the only essential lipoprotein component of the complex. We show that this lipoprotein is required for the proper assembly and/or targeting of OMPs to the OM but not the assembly of lipopolysaccharides (LPS). Depletion of YfiO causes similar phenotypes as does the depletion of YaeT, and we conclude that YfiO plays a critical role in YaeT-mediated OMP folding. We demonstrate that YfiO and YfgL directly interact with YaeT in vitro, while NlpB interacts directly with YfiO. Genetic analysis verifies the importance of YfiO and its interactions with NlpB in maintaining the functional integrity of the YaeT complex.