The lic3 locus of Haemophilus influenzae consists of four open reading frames. The derived amino acid sequences of orf2 and orf4 exhibit homology to Escherichia coli GalE and AdK, respectively. The functions of orf1 and orf3 remain unknown. orf1 contains multiple tandem repeats of the tetrameric DNA sequence CAAT near the 5' end. Two possible translational starts (ATG1 and ATG2) lie upstream. We have used lacZ fusions to investigate whether changes in the number of CAAT repeats in conjunction with differential usage of the upstream frames control the expression of lic3-orf1. Phase-variable expression of lacZ was observed for individual colonies and could be related to variable numbers of CAAT repeats. Of the three possible upstream frames, only one, containing the more downstream of the two possible ATG start codons (ATG2), is used for strong expression of lacZ. Utilization of the more upstream ATG (ATG1) or ATG2 was observed with medium-level expression, while utilization of any of the three possible frames was observed when lacZ was expressed at low to undetectable levels, indicating that other mechanisms may affect expression. To investigate this, lacZ was fused in frame with ATG2 of lic3-orf1, with concomitant deletion of the repeats. Phase-variable expression was still observed, supporting the view that an alternative level of control operates in conjunction with the repeat mechanism.