It is now apparent that the signaling molecule 3',5'-cyclic diguanylic acid (c-di-GMP) is a central regulator of the prokaryote biofilm lifestyle and recent evidence also links this molecule to virulence. Environmentally responsive signal transduction systems that control expression and/or activity of the enzymes (GGDEF and EAL domain containing proteins) that are responsible for synthesis and degradation of c-di-GMP have recently been identified. Members of the phosphorelay family feature prominently amongst these systems, which include several with hybrid polydomain sensors and one that is similar to well-characterized chemotaxis-controlling pathways. These findings support the hypothesis that c-di-GMP levels are tightly controlled in response to a broad range, in terms of both diversity and intensity, of extracellular signals. Insight into how c-di-GMP affects changes in gene expression and/or protein activity has come from the demonstration that proteins containing the PilZ domain can bind c-di-GMP and control phenotypes involved in biofilm formation and virulence. These recent developments should pave the way for researchers to answer the important question of how a vast array of extracellular signals that are sensed by multiple sensory transduction pathways which all lead to the production or destruction of c-di-GMP are coordinated such that the appropriate phenotypic response is produced.