Aer, the Escherichia coli aerotaxis (oxygen-sensing) receptor, is representative of a small class of receptors that face the cytoplasm in bacteria. Instead of sensing oxygen directly, Aer detects redox changes in the electron transport system or cytoplasm when the bacteria enter or leave a hypoxic microniche. As a result, Aer sensing also enables bacteria to avoid environments where carbon deficiency, unfavourable reduction potential or other insults would limit energy production. An FAD-binding PAS domain is the sensor for Aer and a HAMP domain interacts with the PAS domain to form an input–output module for signal transduction. By analogy to the first solution structure of an isolated HAMP domain from Archaeoglobus, Aer HAMP is proposed to fold into a four-helix bundle that rotates between a signal-on and signal-off conformation. Aer is the first protein in which a PAS–HAMP input–output module has been investigated. The structure and signal transduction mechanism of Aer is providing important insights into signalling by PAS and HAMP domains.