The Pho regulon is controlled by the histidine kinase-response regulator pair SphS-SphR in many cyanobacteria and up-regulation of the Pho regulon can be monitored by measuring alkaline phosphatase activity. However, the mechanism regulating signal transduction between SphS and SphR has not been described. We have created a cyanobacterial strain allowing the introduction of mutations into the transmitter domain of SphS. Mutations at Thr-167, adjacent to the H motif of SphS, introduce elevated alkaline phosphatase activity in the presence of phosphate and an enhancement of alkaline phosphatase activity, when compared to the control strain, in phosphate-limiting media. SphU acts as a negative regulator of the SphS-SphR system in Synechocystis sp. PCC 6803 and we show that constitutive alkaline phosphatase activity in the absence of SphU requires signal transduction through SphS and SphR. However, constitutive activity in the absence of SphU is severely attenuated in the DeltaSphU:SphS-T167N mutant. Our data suggest that Thr-167 contributes to the mechanism underlying regulation by SphU. We have also assembled a deletion mutant system allowing the introduction of mutations into SphR and show that Gly-225 and Trp-236, which are both conserved in SphR from cyanobacteria, are essential for activation of the Pho regulon under phosphate-limiting conditions.