Quantitation of two-component protein activities is becoming increasingly important to understand the general design principles for this widely distributed prokaryotic signaling pathway. In many two-component systems (TCSs), phosphatase activity of the sensor histidine kinase (HK) plays a major role in controlling the system output and resetting the system to the prestimulus state. Quantitation of the phosphatase activity is often carried out in vitro, usually with truncated proteins that may not recapitulate the intact HK in the cellular environment. This chapter outlines a method for characterizing the intracellular phosphatase activity by investigating the TCS deactivation dynamics upon stimulus withdrawal. Two experimental approaches, the direct Phos-tag gel analysis and the indirect reporter assay, are described for measuring the TCS deactivation dynamics in cell. Combined with a mathematic model, the experimentally determined kinetics can lead to proper evaluation of the intracellular phosphatase activity.