The RNA‐binding protein RapZ cooperates with small RNAs (sRNAs) GlmY and GlmZ to regulate the glmS mRNA in Escherichia coli. Enzyme GlmS synthesizes glucosamine‐6‐phosphate (GlcN6P), initiating cell envelope biosynthesis. GlmZ activates glmS expression by base‐pairing. When GlcN6P is ample, GlmZ is bound by RapZ and degraded through ribonuclease recruitment. Upon GlcN6P depletion, the decoy sRNA GlmY accumulates through a previously unknown mechanism and sequesters RapZ, suppressing GlmZ decay. This circuit ensures GlcN6P homeostasis and thereby envelope integrity. In this work, we identify RapZ as GlcN6P receptor. GlcN6P‐free RapZ stimulates phosphorylation of the two‐component system QseE/QseF by interaction, which in turn activates glmY expression. Elevated GlmY levels sequester RapZ into stable complexes, which prevents GlmZ decay, promoting glmS expression. Binding of GlmY also prevents RapZ from activating QseE/QseF, generating a negative feedback loop limiting the response. When GlcN6P is replenished, GlmY is released from RapZ and rapidly degraded. We reveal a multifunctional sRNA‐binding protein that dynamically engages into higher‐order complexes for metabolite signaling.