Maintenance of rod-shape in bacterial cells depends on the actin-like protein MreB. Deletion of mreB from Pseudomonas fluorescens SBW25 results in viable spherical cells of variable volume and reduced fitness. Using a combination of time-resolved microscopy and biochemical assay of peptidoglycan synthesis, we show that reduced fitness is a consequence of perturbed cell size homeostasis that arises primarily from differential growth of daughter cells. A 1000-generation selection experiment resulted in rapid restoration of fitness with derived cells retaining spherical shape. Mutations in the peptidoglycan synthesis protein Pbp1A were identified as the main route for evolutionary rescue with genetic reconstructions demonstrating causality. Compensatory pbp1A mutations that targeted transpeptidase activity enhanced homogeneity of cell wall synthesis on lateral surfaces and restored cell size homeostasis. Mechanistic explanations require enhanced understanding of why deletion of mreB causes heterogeneity in cell wall synthesis. We conclude by presenting two testable hypotheses, one of which posits that heterogeneity stems from non-functional cell wall synthesis machinery, while the second posits that the machinery is functional, albeit stalled. Overall, our data provide support for the second hypothesis and draw attention to the importance of balance between transpeptidase and glycosyltransferase functions of peptidoglycan building enzymes for cell shape determination.