Expression of the degradative D-amino acid dehydrogenase (dad) operon is known to be increased when Escherichia coli is grown in the presence of D- or L-alanine. Alanine is thought to act as an inducer to block the action of a postulated repressor. This operon is also believed to be regulated by catabolite repression. We have used in vivo and in vitro experiments that show that the dad repressor is the leucine-responsive regulatory protein (Lrp). dad expression in a dad-lacZ operon fusion strain was increased four- to sevenfold when cells were grown in minimal medium containing alanine or leucine. A strain lacking Lrp had high-level constitutive dad expression. Gel retardation and footprinting studies revealed that Lrp binds in vitro to multiple sites over a large area in the dad promoter region. This binding was reduced by alanine or leucine. In vitro transcription assays, using a plasmid template and primer extension analysis, identified three major dad transcripts (Tr1, Tr2, and Tr3). The formation of these transcripts was differentially regulated by cyclic AMP-cyclic AMP receptor protein complex, and each was strongly repressed by Lrp. Alanine or leucine completely (for Tr1 and Tr2) or partially (for Tr3) reversed Lrp inhibition. Site-directed mutagenesis of an Lrp binding site strongly reduced Lrp binding and prevented Lrp repression of dad transcription in vivo and in vitro. Taken together, these results strongly suggest that Lrp and alanine or leucine act directly to repress and induce, respectively, transcription of the dad operon.