Significance. In recent years, bacterial iron-sulfur cluster proteins that function as regulators of gene transcription have emerged as a major new group. In all cases, the cluster acts as a sensor of the environment and enables the organism to adapt to the prevailing conditions. This can range from mounting a response to oxidative or nitrosative stress to switching between anaerobic and aerobic respiratory pathways. The sensitivity of these ancient cofactors to small molecule reactive oxygen and nitrogen species, in particular, make them ideally suited to function as sensors. Recent Advances. An important challenge is to obtain mechanistic and structural information about how these regulators function and, in particular, how the chemistry occurring at the cluster drives the subsequent regulatory response. For several regulators, including FNR, SoxR, NsrR, IscR and Wbl proteins, major advances in understanding have been gained recently and these are reviewed here. Critical Issues. A common theme emerging from these studies is that the sensitivity and specificity of the cluster of each regulatory protein must be exquisitely controlled by the protein environment of the cluster. Future Directions. A major future challenge is to determine, for a range of regulators, the key factors for achieving control of sensitivity/specificity. Such information will lead, eventually, to a system understanding of stress response, which often involves more than one regulator.