Dispersion enables biofilm bacteria to transit from the biofilm to the planktonic growth state and to spawn novel communities in new locales. Although the chemotaxis protein BdlA plays a role in the dispersion of Pseudomonas aeruginosa biofilms in response to environmental cues, little is known about regulation of BdlA activity or how BdlA modulates the dispersion response. Here, we demonstrate that BdlA in its native form is inactive and is activated upon nonprocessive proteolysis at a ClpP-protease-like cleavage site located between the Per Arnt Sim (PAS) sensory domains PASa and PASb. Activation of BdlA to enable biofilm dispersion requires phosphorylation at tyrosine-238 as a signal, elevated c-di-GMP levels, the chaperone ClpD, and the protease ClpP. The resulting truncated BdlA polypeptide chains directly interact and are required for P. aeruginosa biofilms to disperse. Our results provide a basis for understanding the mechanism of biofilm dispersion that may be applicable to a large number of biofilm-forming pathogenic species. Insights into the mechanism of BdlA function have implications for the control of biofilm-related infections.