A major breakthrough in understanding the bacterial cell is the discovery that the cell is highly organized at the level of protein localization. Proteins are positioned at particular sites in bacteria, including the cell pole, the incipient division plane, and the septum. Differential protein localization can control DNA replication, chromosome segregation, and cytokinesis and is responsible for generating daughter cells with different fates upon cell division. Recent discoveries have revealed that progression through the cell cycle and communication between cellular compartments are mediated by two-component signal transduction systems and signaling pathways involving transcription factor activation by proteolytic processing. Asymmetric cell division in Caulobacter crescentus and sporulation in Bacillus subtilis are used as paradigms for the control of the cell cycle and cellular morphogenesis in bacterial cells.