The penicillinase repressor (PENI) negatively regulates expression of the penicillinase gene (penP) in Bacillus licheniformis by binding to its operators located within the promoter region of penP.penI codes for a protein with 128 amino acids. Filter-binding analyses suggest that the active form of the repressor is a dimer. Genetic analyses of PENI derivatives showed that the repressor carrying either a 6-amino-acid deletion near the N terminus or a 14-amino-acid deletion at the C terminus was functionally inactive in vivo. A repressor derivative carrying a 6-amino-acid deletion within its N-terminal region was extensively purified and used in DNA footprinting and subunit cross-linking analyses. The results of these studies showed that the repressor derivative had lost its ability to bind operator specifically even though it could dimerize effectively. In similar studies, we demonstrated that an N-terminal portion of PENI with a molecular mass of 10 kDa derived by digestion with papain was able to bind operator specifically but with reduced affinity and had completely lost its ability to dimerize. These data suggest that the repressor has two functional and separable domains. The amino-terminal domain of the repressor is responsible for operator recognition, and the carboxyl-terminal domain is involved in subunit dimerization.