The PDZ protease DegS senses mislocalized outer membrane proteins and initiates the sigmaE pathway in the bacterial periplasm. This unfolded protein response pathway is activated by processing of the anti-sigma factor RseA by DegS and other proteases acting downstream of DegS. DegS mediates the rate-limiting step of sigma E induction and its activity must be highly specific and tightly regulated. While DegS is structurally and biochemically well studied, the determinants of its pronounced substrate specificity are unknown. We therefore performed swapping experiments by introducing elements of the homologous but unspecific PDZ protease DegP. Introduction of loop L2 of DegP into DegS converted the enzyme into a non-specific protease, while swapping of PDZ domains did not. Therefore, loop L2 of the protease domain is a key determinant of substrate specificity. Interestingly, swapping of loop L2 did not affect the tight regulation of DegS. In addition, the combined introduction of loop L2 and PDZ domain 1 of DegP into DegS converted DegS even further into a DegP-like protease. These and other data suggest that homologous enzymes with distinct activities and regulatory features can be converted by simple genetic modifications.