Bacteria sense environmental cues and regulate gene expression accordingly so as to persist in diverse niches. QseC is a membrane sensor kinase shown in enterohemorrhagic Escherichia coli to respond to host and bacterial signals by phosphorylating the QseB response regulator at residue D51, resulting in QseB activation and presumably upregulation of virulence genes. We studied QseBC in uropathogenic E. coli (UPEC). UPEC establish infection by colonizing and invading bladder cells. After invasion, UPEC can escape into the cytoplasm where they can form intracellular bacterial communities. Deletion of qseC significantly attenuated intracellular bacterial community formation and virulence, whereas paradoxically qseB deletion did not impact pathogenesis. We found that QseB upregulates its own expression in the qseC mutant, arguing that it is activated even in the absence of QseC. However, expression of QseB, but not a QseB_D51A mutant, in the absence of QseC resulted in downregulation of type 1 pili, curli and flagella. We observed similar phenotypes with enterohemorrhagic E. coli, showing that this is not a UPEC-specific phenomenon. Target gene expression is restored when QseC is present. We discovered that QseC has phosphatase activity required for QseB dephosphorylation. Thus, the QseC phosphatase capacity is critical for modulating QseB activity and subsequent gene expression.