Bacterial capsular polysaccharides (CPS) are produced by a multi-protein membrane complex, in which a particular type of tyrosine-autokinases named BY-kinases, regulate their polymerization and export. However, our understanding of the role of BY-kinases in these processes remains incomplete. In the human pathogen Streptococcus pneumoniae, the BY-kinase CpsD localizes at the division site and participates in the proper assembly of the capsule. In this study, we show that the cytoplasmic C-terminal end of the transmembrane protein CpsC is required for CpsD autophosphorylation and localization at mid-cell. Importantly, we demonstrate that the CpsC/CpsD complex captures the polysaccharide polymerase CpsH at the division site. Together with the finding that capsule is not produced at the division site in cpsD and cpsC mutants, these data show that CPS production occurs exclusively at mid-cell and is tightly dependent on CpsD interaction with CpsC. Next, we have analyzed the impact of CpsD phosphorylation on CPS production. We show that dephosphorylation of CpsD induces defective capsule production at the septum together with aberrant cell elongation and nucleoid defects. We observe that the cell division protein FtsZ assembles and localizes properly although cell constriction is impaired. DAPI staining together with localization of the histone-like protein HlpA further show that chromosome replication and/or segregation is defective suggesting that CpsD autophosphorylation interferes with these processes thus resulting in cell constriction defects and cell elongation. We show that CpsD shares structural homology with ParA-like ATPases and that it interacts with the chromosome partitioning protein ParB. Total internal reflection fluorescence microscopy imaging demonstrates that CpsD phosphorylation modulates the mobility of ParB. These data support a model in which phosphorylation of CpsD acts as a signaling system coordinating CPS synthesis with chromosome segregation to ensure that daughter cells are properly wrapped in CPS.