Gram-negative bacteria are surrounded by two membrane bilayers separated by a space termed the periplasm. The periplasm is a multipurpose compartment separate from the cytoplasm whose distinct reducing environment allows more efficient and diverse mechanisms of protein oxidation, folding, and quality control. The periplasm also contains structural elements and important environmental sensing modules, and it allows complex nanomachines to span the cell envelope. Recent work indicates that the size or intermembrane distance of the periplasm is controlled by periplasmic lipoproteins that anchor the outer membrane to the periplasmic peptidoglycan polymer. This periplasm intermembrane distance is critical for sensing outer membrane damage and dictates length of the flagellar periplasmic rotor, which controls motility. These exciting results resolve longstanding debates about whether the periplasmic distance has a biological function and raise the possibility that the mechanisms for maintenance of periplasmic size could be exploited for antibiotic development.