The proteins KdpD and KdpE are crucial to the osmotic regulation of the kdpABC operon that is responsible for the high-affinity K+ ion transport system in Escherichia coli. We demonstrated previously that the response regulator, KdpE, is capable of undergoing phosphorylation mediated by the sensory protein kinase, KdpD. In this study, we obtained biochemical evidence supporting the view that when KdpE is phosphorylated, it takes on an active form that exhibits relatively high affinity for the kdpABC promoter, which in turn results in activation of the kdpABC operon. It was also suggested that the central hydrophobic domain of KdpD, which is conceivably responsible for membrane anchoring of this protein, plays a role in the signalling mechanism underlying KdpE phosphorylation in response to hyperosmotic stress.