Expression of the lysine decarboxylase gene (cadA) of Escherichia coli is induced upon external acidification. To dissect the molecular mechanisms responsible for this regulation, we analyzed a 4.2-kbp region upstream from cadA. DNA sequencing revealed two long open reading frames upstream of and on the same strand as cadA. One of these, cadB, is 444 codons long and is situated immediately upstream of cadA. Transcriptional fusions between fragments upstream of cadA and lacZ, Northern (RNA) hybridization, primer extension, and site-directed mutagenesis experiments defined a promoter, Pcad, upstream of cadB that was responsible for pH-regulated expression of cadA. Upstream of Pcad is an open reading frame, cadC, consisting of 512 codons. The predicted amino terminal region of the cadC gene product (CadC) resembles the carboxy-terminal domain of prokaryotic transcriptional activators involved in environmental sensing. Tn10 insertions within or immediately upstream of cadC abolished Pcad activity, suggesting that cadC encodes a positive transcription factor. Expression of plasmid-borne cadC in the Tn10 mutants restored Pcad activity, while introduction of a plasmid expressing truncated CadC resulted in the inability to complement. The presence of Pcad on a multicopy plasmid was found to lower expression arising from chromosomal Pcad, suggesting that a positive-acting factor is limiting. Our data suggests that cadA, cadB, and the acid-inducible Pcad comprise, at least in part, the cad operon which is under control of the cadC product.