RseP, an Escherichia coli S2P family intramembrane cleaving protease, is involved in regulation of the extracytoplasmic stress response and membrane quality control through specific cleavage of substrates. Recent research suggested that the PDZ domains and the MRE beta-loop (membrane-reentrant beta-loop) are involved in substrate discrimination; the former would serve to prevent cleavage of substrates with a large periplasmic domain, whereas the latter would directly interact with the substrate's transmembrane segment and induce its conformational change. However, the mechanisms underlying specific substrate recognition and cleavage by RseP are not fully understood. Here, the roles of the N-terminal part of the first cytoplasmic loop region (C1N) of RseP that contains a highly conserved GFG motif were investigated. A Cys modifiability assay suggested that C1N is partly membrane-inserted like the MRE beta-loop. Pro, but not Cys, substitutions in the GFG motif region compromised the proteolytic function of RseP, suggesting the importance of a higher order structure of this motif region. Several lines of evidence indicated that the GFG motif region directly interacts with the substrate and also aids the function of the MRE beta-loop that participates in substrate recognition by RseP. These findings provide insights into the substrate recognition mechanisms of S2P proteases.