Peptidoglycan (PG) is a highly cross-linked, protective mesh-like sacculus that surrounds the bacterial cytoplasmic membrane. Expansion of PG is tightly coupled to growth of a bacterial cell and requires hydrolases to cleave the cross-links for insertion of nascent PG material. In Escherichia coli, a proteolytic system comprising the periplasmic PDZ-protease Prc and the lipoprotein adaptor NlpI contributes to PG enlargement by regulating cellular levels of MepS, a cross-link-specific hydrolase. Here, we demonstrate how NlpI binds Prc to facilitate the degradation of its substrate MepS by structural and mutational analyses. An NlpI homodimer binds two molecules of Prc and forms three-sided MepS-docking cradles using its tetratricopeptide repeats. Prc forms a monomeric bowl-shaped structure with a lid-like PDZ domain connected by a substrate-sensing hinge that recognizes the bound C terminus of the substrate. In summary, our study reveals mechanistic details of protein degradation by the PDZ-protease Prc bound to its cognate adaptor protein.