The soil bacterium Streptomyces reticuli secretes the octameric protein HbpS that acts as a sensory component of the redox-signalling pathway HbpS-SenS-SenR. This system modulates a genetic response on iron- and haem-mediated oxidative stress. Moreover, HbpS alone provides this bacterium with a defence mechanism to the presence of high concentrations of iron ions and haem. While the protection against haem has been related to its haem-binding and haem-degrading activity, the interaction with iron has not been studied in detail. In this work, we biochemically analyzed the iron-binding activity of a set of generated HbpS mutant proteins and present evidence showing the involvement of one internal and two exposed D/EXXE motifs in binding of high quantities of ferrous iron, with the internal E78XXE81 displaying the tightest binding. We additionally show that HbpS is able to oxidize ferrous to ferric iron ions. Based on the crystal structure of both the wild-type and the mutant HbpS-D78XXD81, we conclude that the local arrangement of the side chains from the glutamates in E78XXE81 within the octameric assembly is a pre-requisite for interaction with iron. The data obtained led us to propose that the exposed and the internal motif build a highly specific route that is involved in the transport of high quantities of iron ions into the core of the HbpS octamer. Furthermore, physiological studies using Streptomyces transformants secreting either wild-type or HbpS mutant proteins and different redox-cycling compounds led us to conclude that the iron-sequestering activity of HbpS protects these soil bacteria from the hazardous side effects of peroxide- and iron-based oxidative stress.