Francisella tularensis is a gram-negative bacterium that is highly virulent in humans, causing the disease tularemia. F. novicida is closely related to F. tularensis and exhibits high virulence in mice, but it is avirulent in healthy humans. An F. novicida-specific gene cluster (FTN0451 to FTN0456) encodes two proteins with diguanylate cyclase (DGC) and phosphodiesterase (PDE) domains that modulate the synthesis and degradation of cyclic di-GMP (cdGMP). No DGC- or PDE-encoding protein genes are present in the F. tularensis genome. F. novicida strains lacking either the two DGC/PDE genes (cdgA and cdgB) or the entire gene cluster (strain KKF457) are defective for biofilm formation. In addition, expression of CdgB or a heterologous DGC in strain KKF457 stimulated F. novicida biofilms, even in a strain lacking the biofilm regulator QseB. Genetic evidence suggests that CdgA is predominantly a PDE, while CdgB is predominantly a DGC. The F. novicida qseB strain showed reduced cdgA and cdgB transcript levels, demonstrating an F. novicida biofilm signaling cascade that controls cdGMP levels. Interestingly, KKF457 with elevated cdGMP levels exhibited a decrease in intramacrophage replication and virulence in mice, as well as increased growth yields and biofilm formation in vitro. Microarray analyses revealed that cdGMP stimulated the transcription of a chitinase (ChiB) known to contribute to biofilm formation. Our results indicate that elevated cdGMP in F. novicida stimulates biofilm formation and inhibits virulence. We suggest that differences in human virulence between F. novicida and F. tularensis may be due in part to the absence of cdGMP signaling in F. tularensis.