Summary In Pseudomonas aeruginosa, alginate overproduction, also known as mucoidy, is negatively regulated by the transmembrane protein MucA, which sequesters the alternative sigma factor AlgU. MucA is degraded via a proteolysis pathway that frees AlgU from sequestration, activating alginate biosynthesis. Initiation of this pathway normally requires two signals: peptide sequences in unassembled outer‐membrane proteins (OMPs) activate the AlgW protease, and unassembled lipopolysaccharides bind periplasmic MucB, releasing MucA and facilitating its proteolysis by activated AlgW. To search for novel alginate regulators, we screened a transposon library in the non‐mucoid reference strain PAO1, and identified a mutant that confers mucoidy through overexpression of a protein encoded by the chaperone‐usher pathway gene cupB5. CupB5‐dependent mucoidy occurs through the AlgU pathway and can be reversed by overexpression of MucA or MucB. In the presence of activating OMP peptides, peptides corresponding to a region of CupB5 needed for mucoidy further stimulated AlgW cleavage of MucA in vitro. Moreover, the CupB5 peptide allowed OMP‐activated AlgW cleavage of MucA in the presence of the MucB inhibitor. These results support a novel mechanism for conversion to mucoidy in which the proteolytic activity of AlgW and its ability to compete with MucB for MucA is mediated by independent peptide signals.