Bis-(3',5')-cyclic-dimeric-guanosine monophosphate (c-di-GMP) has been shown to be a global regulatory molecule that modulates the reciprocal responses of bacteria to activate either virulence pathways or biofilm formation. The mechanism of c-di-GMP signal transduction, including recognition of c-di-GMP and subsequent phenotypic regulation, remain largely uncharacterized. The key components of these regulatory pathways are the various adaptor proteins (c-di-GMP receptors). There is compelling evidence suggesting that, in addition to PilZ domains, there are other unidentified c-di-GMP receptors. Here we show that the PelD protein of Pseudomonas aeruginosa is a novel c-di-GMP receptor that mediates c-di-GMP regulation of PEL polysaccharide biosynthesis. Analysis of PelD orthologues identified a number of conserved residues that are required for c-di-GMP binding as well as synthesis of the PEL polysaccharide. Secondary structure similarities of PelD to the inhibitory site of diguanylate cyclase suggest that a common fold can act as a platform to bind c-di-GMP. The combination of a c-di-GMP binding site with a variety of output signalling motifs within one protein domain provides an explanation for the specificity for different cellular responses to this regulatory dinucleotide.