Enterohaemorrhagic E. coli (EHEC) is a significant human pathogen that causes disease ranging from acute diarrhoea to potentially life threatening haemolytic uremic syndrome (HUS) and renal failure. The most severe disease symptoms are caused by the release of Shiga toxins, AB5-family toxins that depurinate 28S ribosomal RNA in Gb3-rich renal endothelium cells. Shiga toxins are encoded within the late transcript of lambdoid bacteriophages and are transcribed from the late promoter, PR’. The late promoter is constitutively active, but constitutively terminated at tR’ downstream of the late promoter during lysogeny. Transcription and release of the Shiga toxin is regulated by lytic induction of the phage and anti-termination of the late transcript. We have found that the short tR’ terminated transcript is bound by the small RNA chaperone Hfq and accumulates to high levels in StxΦ lysogens. The PR’ transcript, here termed Stx small RNA (StxS), is processed into a shorter 74nt sRNA by the major endoribonuclease RNase E. Surprisingly, the StxS sRNA is not part of the StxΦ regulatory network and phage propagation is not affected in a ∆stxS mutant. We find that StxS-mRNA interactions were recovered in our recent sRNA-mRNA interaction network analysis (using RNase E-CLASH) and that StxS interacts with the stationary phase stress response sigma factor, RpoS. Using GFP transcriptional and translational fusions we demonstrate that StxS activates RpoS translation 5-fold, and that StxS is required for wild-type induction of RpoS in EHEC. StxS activation of rpoS mRNA is not required for osmotic or acid tolerance, but promotes high cell density growth under nutrient-limited conditions. These results suggest that StxS may allow host colonisation at higher cell densities, potentially leading to higher Shiga toxin titres and an increased probability of developing severe disease symptoms including HUS.