YHS-domains are small protein modules which have been proposed to bind transition-metal ions like the related TRASH-domains. They are found in a variety of enzymes including copper-transporting ATPases and adenylyl cyclases. Here we investigate a class IIIc adenylyl cyclase from Mycobacterium phlei which contains a C-terminal YHS-domain linked to the catalytic domain by a peptide of 8 amino acids. We expressed the isolated catalytic domain and the full-length enzyme in E. coli. The catalytic domain requires millimolar Mn2+ as a cofactor for efficient production of cAMP, is unaffected by low micromolar concentrations of Cu2+ and inhibited by concentrations higher than 10 μM. The full-length enzyme also requires Mn2+ in the absence of an activator. However, 1–10 μM Cu2+ stimulate the M. phlei adenylyl cyclase sixfold when assayed with Mn2+. With Mg2+ as the probable physiological cofactor of the adenylyl cyclase Cu2+ specifically switches the enzyme from an inactive to an active state. Other transition-metal ions do not elicit activity with Mg2+. We favor the view that the YHS-domain of M. phlei adenylyl cyclase acts as a sensor for copper ions and signals elevated levels of the transition-metal via cAMP. By analogy to TRASH-domains binding of Cu2+ probably occurs via one conserved aspartate and three conserved cysteine-residues in the YHS-domain.