Mechanosensitive channels play an important role in the adaptation of cells to hypo-osmotic shock. Among members of this channel family in Escherichia coli, the exact function and physiological role of the mechanosensitive channel homolog YbdG remain unclear. Characterization of YbdG’s physiological role has been hampered by its lack of measurable transport activity. Using a nitrosoguanidine mutagenesis-aided screen in combination with next-generation sequencing, here we isolated a mutant with a point mutation in ybdG. This mutation (resulting in a I167T change) conferred sensitivity to high osmotic stress, and the mutant cells differed from WT cells in morphology during hyperosmotic stress at alkaline pH. Interestingly, unlike the cells containing the I167T variant, a null-ybdG mutant did not exhibit this sensitivity and phenotype. Although I167T was located near the putative ion-conducting pore in a transmembrane region of YbdG, no change in ion channel activities of YbdG-I167T was detected. Of note, introduction of the WT C-terminal cytosolic region of YbdG into the I167T variant complemented the osmo-sensitive phenotype. Co-precipitation of proteins interacting with the C-terminal YbdG region led to the isolation of HldD and FbaA, whose overexpression in cells containing the YbdG-I167T variant partially rescued the osmo-sensitive phenotype. This study indicates that YbdG functions as a component of a mechanosensing system that transmits signals triggered by external osmotic changes to intracellular factors. The cellular role of YbdG uncovered here goes beyond its predicted function as an ion or solute transport protein.