Photorhabdus luminescens is a symbiont of entomopathogenic nematodes. Analysis of the genome sequence of this organism revealed a homologue of PhoP-PhoQ, a two-component system associated with virulence in intracellular bacterial pathogens. This organism was shown to respond to the availability of environmental magnesium. A mutant with a knockout mutation in the regulatory component of this system (phoP) had no obvious growth defect. It was, however, more motile and more sensitive to antimicrobial peptides than its wild-type parent. Remarkably, the mutation eliminated virulence in an insect model. No insect mortality was observed after injection of a large number of the phoP bacteria, while very small amounts of parental cells killed insect larvae in less than 48 h. At the molecular level, the PhoPQ system mediated Mg 2؉ -dependent modifications in lipopolysaccharides and controlled a locus (pbgPE) required for incorporation of 4-aminoarabinose into lipid A. Mg 2؉ -regulated gene expression of pbgP1 was absent in the mutant and was restored when phoPQ was complemented in trans. This finding highlights the essential role played by PhoPQ in the virulence of an entomopathogen.