Under iron limitation, the opportunistic human pathogen Pseudomonas aeruginosa produces the siderophore pyochelin. When secreted into the extracellular environment, pyochelin complexes ferric ions and delivers them, via the outer membrane receptor FptA, to the bacterial cytoplasm. Extracellular pyochelin also acts as a signalling molecule, inducing the expression of pyochelin biosynthesis and uptake genes by a mechanism involving the AraC-type regulator PchR. We have identified a 32 bp conserved sequence element (PchR-box) in promoter regions of pyochelin-controlled genes and we show that the PchR-box in the pchR-pchDCBA intergenic region is essential for the induction of the pyochelin biosynthetic operon pchDCBA and the repression of the divergently transcribed pchR gene. PchR was purified as a fusion with maltose-binding protein (MBP). Mobility shift assays demonstrated specific binding of MBP-PchR to the PchR-box in the presence, but not in the absence of pyochelin and iron. PchR-box mutations that interfered with pyochelin-dependent regulation in vivo, also affected pyochelin-dependent PchR-box recognition in vitro. We conclude that pyochelin, probably in its iron-loaded state, is the intracellular effector required for PchR-mediated regulation. The fact that extracellular pyochelin triggers this regulation suggests that the siderophore can enter the cytoplasm.