Rhomboid proteases reside within cellular membranes, but the advantage of this unusual environment is unclear. We discovered membrane immersion allows substrates to be identified in a fundamentally-different way, based initially upon exposing ‘masked’ conformational dynamics of transmembrane segments rather than sequence-specific binding. EPR and CD spectroscopy revealed that the membrane restrains rhomboid gate and substrate conformation to limit proteolysis. True substrates evolved intrinsically-unstable transmembrane helices that both become unstructured when not supported by the membrane, and facilitate partitioning into the hydrophilic, active-site environment. Accordingly, manipulating substrate and gate dynamics in living cells shifted cleavage sites in a manner incompatible with extended sequence binding, but correlated with a membrane-and-helix-exit propensity scale. Moreover, cleavage of diverse non-substrates was provoked by single-residue changes that destabilize transmembrane helices. Membrane immersion thus bestows rhomboid proteases with the ability to identify substrates primarily based on reading their intrinsic transmembrane dynamics.DOI:
http://dx.doi.org/10.7554/eLife.00173.001