This review concerns how Escherichia coli detects environmental inorganic orthophosphate (P i ) to regulate genes of the phosphate (Pho) regulon by the PhoR/PhoB two-component system (TCS). P i control by the PhoR/PhoB TCS is a paradigm of a bacterial signal transduction pathway in which occupancy of a cell surface receptor(s) controls gene expression in the cytoplasm. The P i signaling pathway requires seven proteins, all of which probably interact in a membrane-associated signaling complex. Our latest studies show that P i signaling involves three distinct processes, which appear to correspond to different states of the sensory histidine kinase PhoR: an inhibition state, an activation state, and a deactivation state. We describe a revised model for P i signal transduction of the E. coli Pho regulon.