A glutathione (GSH)-dependent pathway is used for formaldehyde metabolism by a wide variety of prokaryotes and eukaryotes. In this pathway, S-hydroxymethylglutathione, produced by the reaction of formaldehyde with the thiolate moiety of glutathione, is the substrate for a GSH-dependent formaldehyde dehydrogenase (GSH-FDH). While expression of GSH-FDH often increases in the presence of metabolic or exogenous sources of formaldehyde, little is known about the factors that regulate this response. Here, we identify two signal transduction pathways that regulate expression of adhI, the gene encoding GSH-FDH, in Rhodobacter sphaeroides. The loss of the histidine kinase response regulator pair RfdRS or the histidine kinase RfdS increases adhI transcription in the absence of metabolic sources of formaldehyde. Cells lacking RfdRS further increase adhI expression in the presence of metabolic sources of formaldehyde (methanol), suggesting that this negative regulator of GSH-FDH expression does not respond to this compound. In contrast, mutants lacking the histidine kinase response regulator pair AfdRS or the histidine kinase AfdS cannot induce adhI expression in the presence of either formaldehyde or metabolic sources of this compound. AfdR stimulates activity of the adhI promoter in vitro, indicating that this protein is a direct activator of GSH-FDH expression. Activation by AfdR is detectable only after incubation of the protein with acetyl phosphate, suggesting that phosphorylation is necessary for transcription activation. Activation of adhI transcription by acetyl-phosphate-treated AfdR in vitro is inhibited by a truncated RfdR protein, suggesting that this protein is a direct repressor of GSH-FDH expression. Together, the data indicate that AfdRS and RfdRS positively and negatively regulate adhI transcription in response to different signals.