The dipeptide transport operon in bacteria comprises genes for the transport and metabolism of amino acids and dipeptides, as well as haem and haem precursors such as aminolaevulinic acid. Such nutrient and mineral sources are vital for bacteria to survive in and colonize a range of niches. In silico analysis of the dipeptide transport systems in sequenced Pseudomonas species identified the presence of two genes in P. aeruginosa strains that were absent in other sequenced pseudomonads. These genes encode a putative metallopeptidase, PA4498, and a putative transcriptional regulator, PA4499. Proteomic profiling of wild-type PAO1 and a PA4499 mutant strain indicated that PA4499 negatively regulated the putative peptidase, PA4498. Transcriptional fusion analysis verified that expression of PA4498 (mdpA, metallo-dipeptidase aeruginosa) was negatively regulated by the downstream putative transcriptional regulator PA4499 (psdR, Pseudomonas dipeptide regulator). Transcriptional fusion analysis also showed that the dppABCDF operon was under the negative control of psdR. Functional genomic analysis of mdpA indicated that it is required for the metabolism of a range of dipeptides and that it contributes to the cytotoxicity of PAO1 on an epithelial cell line.