Sodalis glossinidius, a maternally inherited endosymbiont of the tsetse fly, maintains genes encoding homologues of the PhoP-PhoQ two-component regulatory system. This two-component system has been extensively studied in facultative bacterial pathogens and is known to serve as an environmental magnesium sensor and a regulator of key virulence determinants. In the current study, we show that the inactivation of the response regulator, phoP, renders S. glossinidius sensitive to insect derived cationic antimicrobial peptides (AMPs). The resulting mutant strain displays reduced expression of genes involved in the structural modification of lipid A that facilitates resistance to AMPs. In addition, the inactivation of phoP alters the expression of type-III secretion system (TTSS) genes encoded within three distinct chromosomal regions, indicating that PhoP-PhoQ also serves as a master regulator of TTSS gene expression. In the absence of phoP, S. glossinidius is unable to superinfect either its natural tsetse fly host or a closely related hippoboscid louse fly. Furthermore, we show that the S. glossinidius PhoQ sensor kinase has undergone functional adaptations that result in a substantially diminished ability to sense ancestral signals. The loss of PhoQ's sensory capability is predicted to represent a novel adaptation to the static symbiotic lifestyle, allowing S. glossinidius to constitutively express genes that facilitate resistance to host derived AMPs.