The genus Azotobacter, belonging to the Pseudomonadaceae family, is characterized by the formation of cysts, which are metabolically dormant cells produced under adverse conditions and able to resist desiccation. Although this developmental process has served as a model for the study of cell differentiation in Gram-negative bacteria, the molecular basis of its regulation is still poorly understood. Here, we report that the ubiquitous second messenger cyclic dimeric GMP (c-di-GMP) is critical for the formation of cysts in Azotobacter vinelandii Upon encystment induction, the levels of c-di-GMP increased, reaching a peak within the first 6 h. In the absence of the diguanylate cyclase MucR, however, the levels of this second messenger remained low throughout the developmental process. A. vinelandii cysts are surrounded by two alginate layers with variable proportions of guluronic residues, which are introduced into the final alginate chain by extracellular mannuronic C-5 epimerases of the AlgE1 to AlgE7 family. Unlike in Pseudomonas aeruginosa, MucR was not required for alginate polymerization in A. vinelandii Conversely, MucR was necessary for the expression of extracellular alginate C-5 epimerases; therefore, the MucR-deficient strain produced cyst-like structures devoid of the alginate capsule and unable to resist desiccation. Expression of mucR was partially dependent on the response regulator AlgR, which binds to two sites in the mucR promoter, enhancing mucR transcription. Together, these results indicate that the developmental process of A. vinelandii is controlled through a signaling module that involves activation by the response regulator AlgR and c-di-GMP accumulation that depends on MucR.IMPORTANCEA. vinelandii has served as an experimental model for the study of the differentiation processes to form metabolically dormant cells in Gram-negative bacteria. This work identifies c-di-GMP as a critical regulator for the production of alginates with specific contents of guluronic residues that are able to structure the rigid laminated layers of the cyst envelope. Although allosteric activation of the alginate polymerase complex Alg8-Alg44 by c-di-GMP has long been recognized, our results show a previously unidentified role during the polymer modification step, controlling the expression of extracellular alginate epimerases. Our results also highlight the importance of c-di-GMP in the control of the physical properties of alginate, which ultimately determine the desiccation resistance of the differentiated cell.