Proteases can play key roles in regulation by controlling the levels of critical components of, for example, signal transduction pathways. Proteolytic processing can remove regulatory proteins when they are not needed, while transforming others from the dormant into the biologically active state. The latter mechanism often involves a subsequent change of cellular localization such as the movement from the membrane to the nucleus. The investigation of these processes has revealed a new type of proteolytic activity, regulated intramembrane proteolysis, and a reversible switch in activity occurring in the HtrA family of serine proteases. The bacterial RseA and the human amyloid precursor processing pathways are used as models to review these novel principles that are evolutionarily conserved and have wide biological implications.