We report the isolation of phoB and phoU mutants of the bacterium Rhizobium (Sinorhizobium) meliloti. These mutants form N2-fixing nodules on the roots of alfalfa plants. R. meliloti mutants defective in the phoCDET (ndvF) encoded phosphate transport system grow slowly in media containing 2 mm Pi, and form nodules which fail to fix nitrogen (Fix−). We show that the transfer of phoB or phoU insertion mutations into phoC mutant strains restores the ability of these mutants to: (i) form normal N2-fixing root-nodules, and (ii) grow like the wild type in media containing 2 mm Pi. We also show that expression of the alternate orfA pit encoded Pi transport system is negatively regulated by the phoB gene product, whereas phoB is required for phoCDET expression. We suggest that in R. meliloti cells growing under Pi limiting conditions, PhoB protein activates phoCDET transcription and represses orfA pit transcription. Our results suggest that there are major differences between the Escherichia coli and R. meliloti phosphate regulatory systems.