The membrane-anchored DjlA protein represents the third member of the DnaJ ‘J-domain’ family of Escherichia coli that includes DnaJ and CbpA. DjlA possesses a J-domain at its extreme C-terminus but shares no additional homology with DnaJ. Our genetic analysis suggests that DjlA acts in concert with the RcsB/C two-component signal transduction system to augment induction of the cps (capsular polysaccharide) operon and synthesis of colanic acid mucoid capsule. The DjlA J-domain is essential for the observed stimulation of this pathway as deletion, or introduction of the mutation H233Q, within the highly conserved HPD tripeptide abolished all inducing activity. Deletion of the transmembrane anchor sequence also abolished all inducing activity. djlA is not an essential gene under all conditions tested, nor is it essential for mucoid capsule biosynthesis; however, strong overexpression leads to rapid loss of cell viability suggesting that the gene is normally tightly regulated. Northern analysis revealed that djlA message was extremely unstable but could be induced or stabilized in response to cold shock. The activation of the cps operon by DjlA is dependent upon both DnaK(Hsp70) and GrpE, and therefore we propose a role for DjlA, together with this chaperone machine, as a novel regulator of a two-component histidine kinase signal transduction pathway.