Two-component related proteins play a major role in regulating the oxidative stress response in the fission yeast, Schizosaccharomyces pombe. For example, the peroxide-sensing Mak2 and Mak3 histidine kinases regulate H(2)O(2)-induced activation of the Sty1 stress-activated protein kinase pathway, and the Skn7-related response regulator transcription factor, Prr1, is essential for activation of the core oxidative stress response genes. Here, we investigate the mechanism by which the S. pombe two-component system senses H(2)O(2), and the potential role of two-component signaling in the regulation of Prr1. Significantly, we demonstrate that PAS and GAF domains present in the Mak2 histidine kinase are essential for redox-sensing and activation of Sty1. In addition, we find that Prr1 is required for the transcriptional response to a wide range of H(2)O(2) concentrations and, furthermore, that two-component regulation of Prr1 is specifically required for the response of cells to high levels of H(2)O(2). Significantly, this provides the first demonstration that the conserved two-component phosphorylation site on Skn7-related proteins influences resistance to oxidative stress and oxidative stress-induced gene expression. Collectively, these data provide new insights into the two-component mediated sensing and signaling mechanisms underlying the response of S. pombe to oxidative stress.