Summary: Extracytoplasmic function (ECF) sigma factors play a key role in the regulation of vital functions in the bacterial response to the environment. In Gram-negative bacteria, activity of these sigma factors is often controlled by cell-surface signalling (CSS), a regulatory system that also involves an outer membrane receptor and a transmembrane anti-sigma factor. To get more insight into the molecular mechanism behind CSS regulation, we have focused on the unique Iut system of Pseudomonas putida. This system contains a hybrid protein containing both a cytoplasmic ECF sigma domain and a periplasmic anti-sigma domain, apparently leading to a permanent interaction between the sigma and anti-sigma factor. We show that the Iut ECF sigma factor regulates the response to aerobactin under iron deficiency conditions and is activated by a proteolytic pathway that involves the sequential action of two proteases: Prc, which removes the periplasmic anti-sigma domain, and RseP, which subsequently removes the transmembrane domain and thereby generates the ECF active transcriptional form. We furthermore demonstrate the role of these proteases in the regulation of classical CSS systems in which the sigma and anti-sigma factors are two different proteins. © 2013 Society for Applied Microbiology and John Wiley & Sons Ltd.