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Timely detection and repair of envelope damage are paramount for bacterial survival. The Regulator of Capsule Synthesis (Rcs) stress response can transduce the stress signals across the multilayered gram-negative cell envelope to regulate gene expression in the cytoplasm. Previous studies defined the overall pathway, which begins with the sensory lipoprotein RcsF interacting with several outer membrane proteins (OMPs). RcsF can also interact with the periplasmic domain of the negative regulator IgaA, derepressing the downstream RcsCDB phosphorelay. However, how the RcsF/IgaA interaction is regulated at the molecular level to activate the signaling in response to stress remains poorly understood. In this study, we used a site-saturated mutant library of rcsF to carry out several independent genetic screens to interrogate the mechanism of signal transduction from RcsF to IgaA. We analyzed several distinct classes of rcsF signaling mutants, and determined the region of RcsF that is critically important for signal transduction. This region is bifunctional as it is important for RcsF interaction with both IgaA and OMPs. The mutant analysis provides strong evidence for conformational changes in the RcsF/OMP complex mediating signal transduction to IgaA, and the first direct evidence that OMPs play an important regulatory role in Rcs signaling.