We show that the two-component signal transduction system of Escherichia coli, CpxA-CpxR, controls the expression of genes encoding cell envelope proteins involved in protein folding and degradation. These findings are based on three lines of evidence. First, activation of the Cpx pathway induces 5- to 10-fold the synthesis of DsbA, required for disulfide bond formation, and DegP, a major periplasmic protease. Second, using electrophoretic mobility shift and DNase I protection assays, we have shown that phosphorylated CpxR binds to elements upstream of the transcription start sites of dsbA, degP, and ppiA (rotA), the latter coding for a peptidyl-prolyl cis/trans isomerase. Third, we have demonstrated increased in vivo transcription of all three genes, dsbA, degP, and ppiA, when the Cpx pathway is activated. We have identified a putative CpxR consensus binding site that is found upstream of a number of other E. coli genes. These findings suggest a potentially extensive Cpx regulon including genes transcribed by sigma70 and sigma(E), which encode factors involved in protein folding as well as other cellular functions.