We present evidence that a bacterial signal transduction cascade that couples morphogenesis with cell cycle progression is regulated by dynamic localization of its components. Previous studies have implicated two histidine kinases, DivJ and PleC, and the response regulator, DivK, in the regulation of morphogenesis in the dimorphic bacterium Caulobacter crescentus. Here, we show that the cytoplasmic response regulator, DivK, exhibits a dynamic, cyclical localization that culminates in asymmetric distribution of DivK within the two cell types that are characteristic of the Caulobacter cell cycle; DivK is dispersed throughout the cytoplasm of the progeny swarmer cell and is localized to the pole of the stalked cell. The membrane-bound DivJ and PleC histidine kinases, which are asymmetrically localized at the opposite poles of the predivisional cell, control the temporal and spatial localization of DivK. DivJ mediates DivK targeting to the poles whereas PleC controls its release from one of the poles at times and places that are consistent with the activities and location of DivJ and PleC in the late predivisional cell. Thus, dynamic changes in subcellular location of multiple components of a signal transduction cascade may constitute a novel mode of prokaryotic regulation to generate and maintain cellular asymmetry.