Transcription from promoter Pu of the upper catabolic operon of the Pseudomonas putida TOL plasmid which specifies conversion of toluene/xylenes to benzoate/toluates is activated by the TOL‐encoded regulator XylR protein in the presence of substrates of the catabolic pathway and in conjunction with the sigma 54(NtrA)‐containing form of RNA polymerase. This regulatory circuit was faithfully reproduced in Escherichia coli in single copy gene dosage by integrating the corresponding controlling determinants into the chromosomes of several K12 derivatives by means of specialized transposons. In vivo monitoring of the activity of a Pu‐lacZ fusion in E. coli strains with different genetic backgrounds demonstrated that integration host factor (IHF) is involved in Pu regulation and that hyperproduction of the XylR protein leads to a decrease of Pu activity in a manner in which deletion of the putative DNA‐binding domain of the XylR does not impair its inhibitory effect when hyperproduced. One discrete IHF binding site and two potential XylR sites (consensus sequence 5′‐TTGANCAAATC‐3′), bracketted by short stretches of DNase I‐hypersensitive bonds, were detected upstream of the transcription initiation site. A model accounting for the features found is proposed which includes the IHF‐promoted looping of upstream XylR‐DNA complexes so that they contact the sigma 54(NtrA)‐RNA polymerase bound at ‐12/‐24 positions.