The regulatory network of the cell envelope stress response in Bacillus subtilis involves both extracytoplasmic function sigma-factors and two-component signal transducing systems. One such system, LiaRS, responds to cell wall antibiotics that interfere with the undecaprenol cycle and to perturbation of the cytoplasmic membrane. It is encoded by the last two genes of the liaIHGFSR locus. Here, we analyzed the expression of two LiaR-dependent operons, liaIHGFSR and yhcYZ-yhdA, and characterized a palindromic sequence required for LiaR-dependent activation. Since induction of the strong liaI promoter leads to both liaIH and liaIHGFRS transcripts, LiaR is positively autoregulated. Systematic deletion analysis of the liaI operon revealed that LiaF is a potent negative regulator of LiaR-dependent gene expression: a nonpolar liaF deletion led to constitutive activation of both characterized LiaR-dependent promoters. The liaF gene is conserved in both sequence and genomic context in the Firmicutes group of gram-positive bacteria, located directly upstream of liaSR orthologs. LiaH, a homolog of Escherichia coli phage shock protein A, also plays a more subtle role in negatively modulating the bacitracin-inducible expression from LiaR-dependent promoters. Our results support a model in which the LiaFRS module integrates both positive and negative feedback loops to transduce cell envelope stress signals.