<title>Abstract</title><italic>Escherichia coli</italic> RseP, a member of the S2P family of intramembrane proteases, is involved in the activation of the σ^E extracytoplasmic stress response and elimination of remnant signal peptides. However, whether RseP has additional cellular functions is unclear. In this study, we attempted to identify new RseP substrates to explore still unknown physiological roles of this protease. Our mass spectrometry-based quantitative proteomic analysis revealed that the levels of several Fec system proteins encoded by the <italic>fecABCDE</italic> operon (<italic>fec</italic> operon) were significantly decreased in an RseP-deficient strain. The Fec system is responsible for the uptake of ferric citrate, and the transcription of the <italic>fec</italic> operon is controlled by FecI, an alternative sigma factor, and its regulator FecR, a single-pass transmembrane protein. Assays with the <italic>fec</italic> operon expression reporter demonstrated that the proteolytic activity of RseP is essential for the ferric citrate-dependent upregulation of the <italic>fec</italic> operon. Analysis using the FecR protein and FecR-derived model proteins showed that FecR undergoes sequential processing at the membrane and that RseP participates in the last step of this sequential processing to generate the N-terminal cytoplasmic fragment of FecR that participates in the transcription of the <italic>fec</italic> operon with FecI. Ferric citrate signal-dependent generation of this cleavage product is the essential and sufficient role of RseP in the transcriptional activation of the <italic>fec</italic> operon. Our study unveiled that <italic>E. coli</italic> RseP performs the intramembrane proteolysis of FecR, a novel physiological role that is essential for regulating iron uptake by the ferric citrate transport system.