By the phrase kingdom, he means the "union of different rational beings in a system by common laws." Since it is through laws that consequences are evaluated based on their universal validity, he states that we can conceive of a systematic whole that includes both the rational beings as ends in themselves, rather than simply means to other ends, and the unique ends which these rational beings may aspire to. This systematic whole is the kingdom of ends.
People can only belong to the kingdom of ends when they give universal laws unto it, and are subject to those same laws, and all laws within. Such rational beings must regard themselves simultaneously as sovereign, when making laws, and as subject, when obeying them. Morality exists in the action of all universal law which can make the kingdom of ends possible. This universal law must be first capable of being universalized completely, and being given its power from a rational being's own will - not exercising rule over it.