RseB from Escherichia coli has been crystallized and crystal structures were determined at 2.4 Å and at 2.8 Å resolution. The structure of cytoplasmic expressed RseB revealed that it consists of two domains; an N-terminal large and a C-terminal small domain. The large domain resembles an unclosed β-barrel that is structurally remarkably similar to a protein family (LolA, LolB) capable of binding the lipid anchor of lipoproteins. Detailed structural comparison of RseB and LolA led to the hypothesis that RseB might be a sensor for mislocalized lipoproteins. The small C-terminal domain, connected to the large domain by a partially unstructured loop, was identified to mediate interaction with RseA. A peptide comprised of a putative helix of RseA was shown to constitute the binding site for RseB. Structure based results presented in this thesis indicate a new role of RseB in acting as a sensor for periplasmic stress: it detects mislocalized lipoproteins in the periplasm and propagates the signal to induce σE-response.