The Arc two-component system is a complex signal transduction system that plays a key role in regulating energy metabolism at the level of transcription in bacteria. This system comprises the ArcB protein, a tripartite membrane-associated sensor kinase, and the ArcA protein, a typical response regulator. Under anoxic growth conditions, ArcB autophosphorylates and transphosphorylates ArcA, which in turn represses or activates the expression of its target operons. Under aerobic conditions, ArcB acts as a phosphatase that catalyzes the dephosphorylation of ArcA-P and thereby releasing its transcriptional regulation. The events for Arc signaling, including signal reception and kinase regulation, signal transmission, amplification, as well as signal output and decay are discussed.