In KT2440, two pyrroloquinoline quinone-dependent ethanol dehydrogenases (PQQ-EDHs) are responsible for the periplasmic oxidation of a broad variety of volatile organic compounds (VOCs). Depending on the availability of rare earth elements (REEs) of the lanthanide series (Ln ), we have recently reported that the transcription of the genes encoding the Ca -utilizing enzyme PedE and the Ln -utilizing enzyme PedH are inversely regulated. With adaptive evolution experiments, site-specific mutations, transcriptional reporter fusions, and complementation approaches, we now demonstrate that the PedS2/PedR2 (PP_2671/PP_2672) two-component system (TCS) plays a central role in the observed REE-mediated switch of PQQ-EDHs in We provide evidence that in the absence of lanthanum (La ), the sensor histidine kinase PedS2 phosphorylates its cognate LuxR-type response regulator PedR2, which in turn not only activates gene transcription but is also involved in repression of Our data further suggest that the presence of La lowers kinase activity of PedS2, either by the direct binding of the metal ions to the periplasmic region of PedS2 or by an uncharacterized indirect interaction, leading to reduced levels of phosphorylated PedR2. Consequently, the decreasing expression and concomitant alleviation of repression causes-in conjunction with the transcriptional activation of the gene by a yet unknown regulatory module-the Ln -dependent transition from PedE- to PedH-catalyzed oxidation of alcoholic VOCs. The function of lanthanides for methanotrophic and methylotrophic bacteria is gaining increasing attention, while knowledge about the role of rare earth elements (REEs) in nonmethylotrophic bacteria is still limited. The present study investigates the recently described differential expression of the two PQQ-EDHs of in response to lanthanides. We demonstrate that a specific TCS is crucial for their inverse regulation and provide evidence for a dual regulatory function of the LuxR-type response regulator involved. Thus, our study represents the first detailed characterization of the molecular mechanism underlying the REE switch of PQQ-EDHs in a nonmethylotrophic bacterium and stimulates subsequent investigations for the identification of additional genes or phenotypic traits that might be coregulated during REE-dependent niche adaptation.