Conserved in bacteria, the histone-like protein HU is crucial for genome organization and expression of many genes. It binds DNA regardless of the sequence and exhibits two binding affinities in vitro, low-affinity to any B-DNA (non-specific) and high-affinity to DNA with distortions like kinks and cruciforms (structure-specific), but the physiological relevance of the two binding modes needed further investigation. We validated and defined the three conserved lysine residues, K3, K18, and K83, in Escherichia coli HU as critical amino acid residues for both non-specific and structure-specific binding and the conserved proline residue P63 additionally for only the structure-specific binding. By mutating these residues in vivo, we showed that two DNA binding modes of HU play separate physiological roles. The DNA structure-specific binding, occurring at specific sites in the E. coli genome, promotes higher-order DNA structure formation, regulating the expression of many genes, including those involved in chromosome maintenance and segregation. The non-specific binding participates in numerous associations of HU with the chromosomal DNA, dictating chromosome structure and organization. Our findings underscore the importance of DNA structure in transcription regulation and promiscuous DNA-protein interactions in a dynamic organization of a bacterial genome.