Mycobacterium smegmatis and several other mycobacteria are able to utilize methanol as the sole source of carbon and energy. We recently showed that N,N-dimethyl-p-nitrosoaniline (NDMA)-dependent methanol dehydrogenase (Mno) is essential for the growth of M. smegmatis on methanol. Although Mno from this bacterium shares high homology with other known methanol dehydrogenases, methanol metabolism in M. smegmatis differs significantly from that of other described methylotrophs. In this study, we dissect the regulatory mechanism involved in the methylotrophic metabolism in M. smegmatis We identify a two-component system (TCS), mnoSR, that is involved in the regulation of mno expression. We show that the MnoSR TCS is comprised of a sensor kinase (MnoS) and a response regulator (MnoR). Our results demonstrate that MnoS undergoes autophosphorylation and is able to transfer its phosphate to MnoR by means of phosphotransferase activity. Furthermore, MnoR shows specific binding to the putative mno promoter region in vitro, thus suggesting its role in the regulation of mno expression. Additionally, we find that the MnoSR system is involved in the regulation of MSMEG_6239, which codes for a putative 1,3-propanediol dehydrogenase. We further show that M. smegmatis lacking mnoSR is unable to utilize methanol and 1,3-propanediol as the sole carbon source, which confirms the role of MnoSR in the regulation of alcohol metabolism. Our data, thus, suggest that the regulation of mno expression in M. smegmatis provides new insight into the regulation of methanol metabolism, which furthers our understanding of methylotrophy in mycobacteria.IMPORTANCE Methylotrophic metabolism has gained huge attention considering its broad application in ecology, agriculture, industries, and human health. The genus Mycobacterium comprises both pathogenic and nonpathogenic species. Several members of this genus are known to utilize methanol as the sole carbon source for growth. Although various pathways underlying methanol utilization have been established, the regulation of methylotrophic metabolism is not well studied. In the present work, we explore the regulation of methanol metabolism in M. smegmatis and discover a dedicated two-component system (TCS), MnoSR, that is involved in its regulation. We show that the loss of MnoSR renders the bacterium incapable of utilizing methanol and 1,3-propanediol as the sole carbon sources. Additionally, we establish that MnoS acts as the common sensor for the alcohols in M. smegmatis.