Pseudomonas aeruginosa hemolytic phospholipase C, PlcH, can degrade phosphatidylcholine (PC) and sphingomyelin in eukaryotic cell membranes and extracellular PC in lung surfactant. Numerous studies implicate PlcH in P. aeruginosa virulence. The phosphorylcholine released by PlcH activity on phospholipids is hydrolyzed by a periplasmic phosphorylcholine phosphatase, PchP. Both plcH gene expression and PchP enzyme activity are positively regulated by phosphorylcholine degradation products, including glycine betaine. Here we report that the induction of plcH and pchP transcription by glycine betaine is mediated by GbdR, an AraC family transcription factor. Mutants that lack gbdR are unable to induce plcH and pchP in media containing glycine betaine or choline and in phosphatidylcholine-rich environments, such as lung surfactant or mouse lung lavage fluid. In T broth containing choline, the gbdR mutant exhibited a 95% reduction in PlcH activity. In electrophoretic mobility shift assays, a GbdR-maltose binding protein fusion bound specifically to both the plcH and pchP promoters. Promoter mapping, alignment of GbdR-regulated promoter sequences, and analysis of targeted promoter mutants that lack GbdR-dependent induction of transcription were used to identify a region necessary for GbdR-dependent transcriptional activation. GbdR also plays a significant role in plcH and pchP regulation within the mouse lung. Our studies suggest that GbdR is the primary regulator of plcH and pchP expression in PC-rich environments, such as the lung, and that pchP and other genes involved in phosphorylcholine catabolism are necessary to stimulate the GbdR-mediated positive feedback induction of plcH.