The gal operon of Escherichia coli is transcribed from two overlapping promoters, PG1 and PG2. Cyclic AMP and its receptor protein (CRP) modulate the two promoters in opposite directions by binding to a single cat locus. Both the promoters are negatively regulated by a single repressor, the product of the galR gene. An operator site, defined by several mutations, has previously been located upstream from the cat locus. We have isolated and characterized a new set of cis-dominant constitutive mutations of the gal operon and determined their locations by DNA sequencing. From these studies, we propose the existence of a second functional gal operator element at an extraordinary site--within galE, the first structural gene. Both the operators, OE (exterior) and OI (interior), are involved in the repression of PG1 and PG2. This would be the first example of the presence of a functional operator element within a structural protein-coding region.