The TodS and TodT proteins form a previously unrecognized and highly specific two-component regulatory system in which the TodS sensor protein contains two input domains, each of which are coupled to a histidine kinase domain. This system regulates the expression of the genes involved in the degradation of toluene, benzene, and ethylbenzene through the toluene dioxygenase pathway. In contrast to the narrow substrate range of this catabolic pathway, the TodS effector profile is broad. TodS has basal autophosphorylation activity in vitro, which is enhanced by the presence of effectors. Toluene binds to TodS with high affinity (Kd = 684 +/- 13 nM) and 1:1 stoichiometry. The analysis of the truncated variants of TodS reveals that toluene binds to the N-terminal input domain (Kd = 2.3 +/- 0.1 microM) but not to the C-terminal half. TodS transphosphorylates TodT, which binds to two highly similar DNA binding sites at base pairs -107 and -85 of the promoter. Integration host factor (IHF) plays a crucial role in the activation process and binds between the upstream TodT boxes and the -10 hexamer region. In an IHF-deficient background, expression from the tod promoter drops 8-fold. In vitro transcription assays confirmed the role determined in vivo for TodS, TodT, and IHF. A functional model is presented in which IHF favors the contact between the TodT activator, bound further upstream, and the alpha-subunit of RNA polymerase bound to the downstream promoter element. Once these contacts are established, the tod operon is efficiently transcribed.