The lipoprotein Lpp is the most numerically abundant protein in Escherichia coli, has been investigated for over 40 years, and has served as the paradigmatic bacterial lipoprotein since its initial discovery. It exists in two distinct forms: a 'bound-form', which is covalently bound to the cell's peptidoglycan layer, and a 'free-form', which is not. Although it is known that the carboxyl-terminus of bound-form Lpp is located in the periplasm, the precise location of free-form Lpp has never been determined. For decades, it has been widely assumed that free-form Lpp is associated with bound-form. In this work, we show that the free and bound forms of Lpp are not largely associated with each other, but are found in distinct subcellular locations. Our results indicate that free-form Lpp spans the outer membrane and is surface-exposed, whereas bound-form Lpp resides in the periplasm. Thus, Lpp represents a novel example of a single lipoprotein that is able to occupy distinct subcellular locations, and challenges models in which the free and bound forms of Lpp are assumed to be associated with each other.