The AtoS-AtoC signal transduction system in E. coli, which induces the atoDAEB operon for the growth of E. coli in short-chain fatty acids, can positively modulate the levels of poly-(R)-3-hydroxybutyrate (cPHB) biosynthesis, a biopolymer with many physiological roles in E. coli. Increased amounts of cPHB were synthesized in E. coli upon exposure of the cells to acetoacetate, the inducer of the AtoS-AtoC two-component system. While E. coli that overproduce both components of the signal transduction system synthesize higher quantities of cPHB (1.5-4.5 fold), those that overproduce either AtoS or AtoC alone do not display such a phenotype. Lack of enhanced cPHB production was also observed in cells overexpressing AtoS and phosphorylation-impaired AtoC mutants. The results were not affected by the nature of the carbon source used, i.e., glucose, acetate or acetoacetate. An E. coli strain with a deletion in the atoS-atoC locus (delta atoSC) synthesized lower amounts of cPHB compared to wild-type cells. When the delta atoSC strain was transformed with a plasmid carrying a 6.4-kb fragment encoding the AtoS-AtoC system, cPHB biosynthesis was restored to the level of the atoSC+ cells. Introduction of a multicopy plasmid carrying a functional atoDAEB operon, but not one with a promoterless operon, resulted in increased cPHB synthesis only in atoSC+ cells in the presence of acetoacetate. These results indicate that the presence of both a functional AtoS-AtoC two-component signal transduction system and a functional atoDAEB operon is critical for the enhanced cPHB biosynthesis in E. coli.