The envelope of Escherichia coli contains approximately 100 different species of lipoproteins, most of which are localized to the inner leaflet of the outer membrane. The localization of lipoprotein (Lol) system, consisting of five Lol proteins, is responsible for the trafficking of lipoproteins to the outer membrane. LolCDE binds to lipoproteins destined for the outer membrane and transfers them to the periplasmic chaperone LolA. Although the cryo-EM structures of E. coli LolCDE have been reported, the mechanisms by which outer membrane lipoproteins are transferred to LolA remain elusive. In this study, we investigated the interaction between LolCDE and lipoproteins using site-specific photo-crosslinking. We introduced a photo-crosslinkable amino acid into different locations across the four helices which form the central lipoprotein-binding cavity, and identified domains that crosslink with peptidoglycan-associated lipoprotein (Pal) in vivo. Using one of the derivatives containing the photo-crosslinkable amino acid, we developed an in vitro system to analyze the binding of lipoproteins to LolCDE. Our results indicate that compound 2, a LolCDE inhibitor, does not inhibit the binding of lipoproteins to LolCDE, but rather promotes the dissociation of bound lipoproteins from LolCDE.