RNase III is a double-stranded RNA-specific endoribonuclease that processes and degrades numerous mRNA molecules in Escherichia coli. A previous genome-wide analysis of E. coli transcripts showed that steady-state levels of mltD mRNA, which encodes membrane-bound lytic murein transglycosylase D, was most affected by changes in cellular concentration of RNase III. Consistent with this observation, in vitro and in vivo analyses of mltD mRNA revealed RNase III cleavage sites in the coding region of mltD mRNA. Introduction of a nucleotide substitution at the identified RNase III cleavage sites inhibited RNase III cleavage activity on mltD mRNA, resulting in, consequently, approximately two-fold increase in the steady-state level of the mRNA. These findings reveal an RNase III-mediated regulatory pathway that modulates mltD expression in E. coli.