A variety of stress situations may affect the activity and survival of plant-beneficial pseudomonads added to soil to control root diseases. This study focused on the roles of the sigma factor AlgU (synonyms, AlgT, RpoE, and sigma(22)) and the anti-sigma factor MucA in stress adaptation of the biocontrol agent Pseudomonas fluorescens CHA0. The algU-mucA-mucB gene cluster of strain CHA0 was similar to that of the pathogens Pseudomonas aeruginosa and Pseudomonas syringae. Strain CHA0 is naturally nonmucoid, whereas a mucA deletion mutant or algU-overexpressing strains were highly mucoid due to exopolysaccharide overproduction. Mucoidy strictly depended on the global regulator GacA. An algU deletion mutant was significantly more sensitive to osmotic stress than the wild-type CHA0 strain and the mucA mutant were. Expression of an algU'-'lacZ reporter fusion was induced severalfold in the wild type and in the mucA mutant upon exposure to osmotic stress, whereas a lower, noninducible level of expression was observed in the algU mutant. Overexpression of algU did not enhance tolerance towards osmotic stress. AlgU was found to be essential for tolerance of P. fluorescens towards desiccation stress in a sterile vermiculite-sand mixture and in a natural sandy loam soil. The size of the population of the algU mutant declined much more rapidly than the size of the wild-type population at soil water contents below 5%. In contrast to its role in pathogenic pseudomonads, AlgU did not contribute to tolerance of P. fluorescens towards oxidative and heat stress. In conclusion, AlgU is a crucial determinant in the adaptation of P. fluorescens to dry conditions and hyperosmolarity, two major stress factors that limit bacterial survival in the environment.