Inducible expression of the aliphatic amidase operon in Pseudomonas aeruginosa is controlled by an antitermination mechanism which allows production of the full-length transcript only in the presence of small-molecule inducers, such as acetamide. Ligand-regulated antitermination is provided by AmiC, the ligand-sensitive negative regulator, and AmiR, the RNA-binding positive regulator. Under non-inducing or repressing growth conditions, AmiC and AmiR form a complex in which the activity of AmiR is silenced. The crystal structure of the AmiC-AmiR complex identifies AmiR as a new and highly unusual member of the response-regulator family of bacterial signal transduction proteins, regulated by sequestration rather than phosphorylation. Comparison with the structure of free AmiC reveals the subtle mechanism of ligand-induced release of AmiR.