In Pseudomonas fluorescens Pf0-1 the availability of inorganic phosphate (Pi) is an environmental signal that controls biofilm formation through a cyclic dimeric GMP (c-di-GMP) signaling pathway. In low Pi conditions, a c-di-GMP phosphodiesterase (PDE) RapA is expressed, depleting cellular c-di-GMP and causing the loss of a critical outer-membrane adhesin LapA from the cell surface. This response involves an inner membrane protein LapD, which binds c-di-GMP in the cytoplasm and exerts a periplasmic output promoting LapA maintenance on the cell surface. Here we report how LapD differentially controls maintenance and release of LapA: c-di-GMP binding to LapD promotes interaction with and inhibition of the periplasmic protease LapG, which targets the N-terminus of LapA. We identify conserved amino acids in LapA required for cleavage by LapG. Mutating these residues in chromosomal lapA inhibits LapG activity in vivo, leading to retention of the adhesin on the cell surface. Mutations with defined effects on LapD's ability to control LapA localization in vivo show concomitant effects on c-di-GMP-dependent LapG inhibition in vitro. To establish the physiological importance of the LapD-LapG effector system, we track cell attachment and LapA protein localization during Pi starvation. Under this condition, the LapA adhesin is released from the surface of cells and biofilms detach from the substratum. This response requires c-di-GMP depletion by RapA, signaling through LapD, and proteolytic cleavage of LapA by LapG. These data, in combination with the companion study by Navarro et al. presenting a structural analysis of LapD's signaling mechanism, give a detailed description of a complete c-di-GMP control circuit--from environmental signal to molecular output. They describe a novel paradigm in bacterial signal transduction: regulation of a periplasmic enzyme by an inner membrane signaling protein that binds a cytoplasmic second messenger.