The PhoQ/PhoP signaling system responds to low magnesium and the presence of certain cationic antimicrobial peptides. It regulates genes important for growth under these conditions, as well as additional genes important for virulence in many gram-negative pathogens. PhoQ is a sensor kinase that phosphorylates and activates the transcription factor PhoP. Since feedback inhibition is a common theme in stress-response circuits, we hypothesized that some members of the PhoP regulon may play such a role in the PhoQ/PhoP pathway. We therefore screened for PhoP-regulated genes that mediate feedback in this system. We found that deletion of mgrB (yobG), which encodes a 47 amino acid peptide, results in a potent increase in PhoP-regulated transcription. In addition, over-expression of mgrB decreased transcription at both high and low concentrations of magnesium. Localization and bacterial two-hybrid studies suggest that MgrB resides in the inner-membrane and interacts directly with PhoQ. We further show that MgrB homologs from Salmonella typhimurium and Yersinia pestis also repress PhoP-regulated transcription in these organisms. In cell regulatory circuits, feedback has been associated with modulating the induction kinetics and/or the cell-to-cell variability in response to stimulus. Interestingly, we found that elimination of MgrB-mediated feedback did not have a significant effect on the kinetics of reporter protein production and did not decrease the variability in expression among cells. Our results indicate MgrB is a broadly conserved membrane peptide that is a critical mediator of negative feedback in the PhoQ/PhoP circuit. This new regulator may function as a point of control that integrates additional input signals to modulate the activity of this important signaling system.