Type I signal peptidases are essential membrane-bound serine proteases that function to cleave the amino-terminal signal peptide extension from proteins that are translocated across biological membranes. The bacterial signal peptidases are unique serine proteases that utilize a Ser/Lys catalytic dyad mechanism in place of the classical Ser/His/Asp catalytic triad mechanism. They represent a potential novel antibiotic target at the bacterial membrane surface. This review will discuss the bacterial signal peptidases that have been characterized to date, as well as putative signal peptidase sequences that have been recognized via bacterial genome sequencing. We review the investigations into the mechanism of Escherichia coli and Bacillus subtilis signal peptidase, and discuss the results in light of the recent crystal structure of the E. coli signal peptidase in complex with a beta-lactam-type inhibitor. The proposed conserved structural features of Type I signal peptidases give additional insight into the mechanism of this unique enzyme.