Extensively industrial applications and ever-accelerated anthropogenic activities have resulted in the dramatic accumulation of Sb2O3 contaminant in the environment, leading to adverse health effects on humans and ecosystems. Although arsenite has been subjected to numerous studies and ArsR-based whole-cell biosensors have been successfully applied in field testing of arsenite, there is limited information on the biological recognition element of Sb2O3 and its actual application in biosensor construction and environmental monitoring. In this study, we identified a specific recognition element of Sb2O3, SxArsR, in Sphingobium xenophagum C1 by the induced bioluminescent signal analysis of gene expression in response to Sb2O3 exposure. Compared to the other four groups of characterized ArsRs, the novel SxArsR lacks the third cysteine residue for binding of arsenite and has a conserved histidine-cysteine “HCXC” binding site that directly and specifically binds for Sb2O3. Sb2O3 can remove SxArsR from the core operator/promoter binding sequence in the −79 region upstream of the start codon of sxarsR. Based on the specificity of SxArsR protein and the sensitivity of SxArsR-binding DNA sequence, SxArsR-based whole-cell biosensor was constructed and showed a linear relationship (R2 = 0.99) from 0.01 to 6.0 μM of Sb2O3 with a detection limit of 0.01 μM. The novel bacterial biosensor also exhibited a good performance in the detection of Sb2O3 in environmental water and sediment samples. Overall, SxArsR-based biosensor represents a promising strategy for Sb2O3 detection and may have a profound impact on further practical application of ArsR biosensor in the dual-signal simultaneous detection of arsenite and Sb2O3.