DegS is a periplasmic Escherichia coli protease, which functions as a trimer to catalyze the initial rate-limiting step in a proteolytic cascade that ultimately activates transcription of stress response genes in the cytoplasm. Each DegS subunit consists of a protease domain and a PDZ domain. During protein folding stress, DegS is allosterically activated by peptides exposed in misfolded outer membrane porins, which bind to the PDZ domain and stabilize the active protease. Proteases are carefully regulated to ensure that these destructive enzymes are only activated under the proper circumstances. For example, most extracellular proteases are synthesized as inactive proenzymes or zymogens (1). In the trypsin proenzyme, the Ser-His-Asp catalytic triad is properly formed, but the oxyanion hole of the active site is malformed and only rearranges to the active structure following the processing event that produces the mature enzyme (2). The activities of intracellular trypsin-like proteases are also regulated by changes in active site conformation. In the DegS protease, for instance, alternative conformations of the oxyanion hole result in an equilibrium distribution of inactive and active enzymes whose populations are controlled by the binding of substrates and allosteric effectors (3-8).Escherichia coli DegS is a trimeric HtrA family enzyme consisting of a trypsin-like protease domain, a PDZ domain, and a sequence that anchors the protease to the periplasmic surface of the inner membrane (3, 9). The trimer is stabilized by interactions between the protease domains. Protein folding stress in the periplasm activates DegS cleavage of RseA, a transmembrane protein whose cytoplasmic domain binds and inhibits the E transcription factor (10, 11). DegS cleavage of RseA initiates a cascade of subsequent cleavages by other proteases, resulting in release of E and transcriptional activation of genes whose products are needed to repair damage caused by envelope stress. The PDZ domain of DegS plays a critical role in signal transduction. Specifically, C-terminal peptides of misfolded outer membrane porins (OMPs), 2 which end with a conserved Tyr-Xaa-Phe motif, bind to the PDZ domain, and activate cleavage of RseA (Fig. 1A and Ref. 3). Indeed, DegS cleavage of RseA in vitro can be accelerated more than 500-fold by OMP peptides (6, 7).OMP peptide activation of DegS appears to occur by relieving inhibitory contacts between the PDZ domain and the protease domain. For example, salt bridges between the PDZ domain and the protease domain are observed in crystal structures of peptide-free DegS, which has a malformed oxyanion hole, but these interactions are absent in peptide-bound DegS, which has a functional oxyanion hole (4, 5). Importantly, disrupting inhibitory interactions between the PDZ domain and the protease domain by point mutations or by deleting the PDZ domain entirely (DegS ⌬PDZ ) activates cleavage of RseA to levels observed with some OMP peptides (6, 7). Moreover, crystal structures of DegS ⌬PDZ closely resemble the acti...