Regulation of tetralin biodegradation operons is one of the examples of unconventional LysR-type mediated transcriptional regulation. ThnR activates transcription from two divergent and closely located promoters PB and PC. Although ThnR activates each promoter independently, transcription from each one increases when both promoters are together. Mutational analysis of the intergenic region shows that cooperative transcription is achieved through formation of a ThnR complex when bound to its respective sites at each promoter, via formation of a DNA loop. Mutations also defined ThnR contact sites that are important for independent transcriptional activation at each promoter. A mutation at the PB promoter region, which abolishes its independent transcription, does not affect at all PB transcription in the presence of the divergent promoter PC, thus indicating that the complex formed via DNA loop can compensate for the deficiencies in the correct protein-DNA interaction at one of the promoters. Combination of mutations in both promoters identifies a region at PC that is not important for its independent transcription but it is essential for cooperative transcription from both promoters. This work provides new insights into the diversity and complexity of activation mechanisms used by the most abundant type of bacterial transcriptional regulators.