Two-component systems (TCSs) are essential for bacteria to sense, respond, and adapt to changing environments, such as elevation of Cu(I)/Ag(I) ions in the periplasm. In Escherichia coli, the CusS–CusR TCS up-regulates the cusCFBA genes under increased periplasmic Cu(I)/Ag(I) concentrations to help maintain metal ion homeostasis. The CusS histidine kinase is a homodimeric integral membrane protein that binds to periplasmic Cu(I)/Ag(I) and transduces a signal to its cytoplasmic kinase domain. However, the mechanism of how metal binding in the periplasm activates autophosphorylation in the cytoplasm is unknown. Here, we report that only one of the two metal ion-binding sites in CusS enhances dimerization of the sensor domain. Utilizing nanodisc technology to study full-length CusS, we show that metal-induced dimerization in the sensor domain triggers kinase activity in the cytoplasmic domain. We also investigated autophosphorylation in the cytoplasmic domain of CusS and phosphotransfer between CusS and CusR. In vitro analyses show that CusS autophosphorylates its conserved H271 residue at the N1 position of the histidine imidazole. The phosphoryl group is removed by the response regulator CusR in a reaction that requires a conserved aspartate at position 51. Functional analyses in vivo of CusS and CusR variants with mutations in the autophosphorylation or phosphoacceptor residues suggest that the phosphotransfer event is essential for metal resistance in E. coli. Biochemical analysis shows that the CusS dimer autophosphorylates using a cis mechanism. Our results support a signal transduction model in which rotation and bending movements in the cytoplasmic domain maintain the mode of autophosphorylation.