Respiratory reduction of nitrate to nitrite is the first key step in the denitrification process that leads to nitrate loss from soils. In Paracoccus pantotrophus, the enzyme system that catalyzes this reaction is encoded by the narKGHJI gene cluster. Expression of this cluster is maximal under anaerobic conditions in the presence of nitrate. Upstream from narK is narR, a gene encoding a member of the FNR family of transcriptional activators. narR is transcribed divergently from the other nar genes. Mutational analysis reveals that NarR is required for maximal expression of the membrane-bound nitrate reductase genes and narK but has no other regulatory function related to denitrification. NarR is shown to require nitrate and/or nitrite is order to activate gene expression. The N-terminal region of the protein lacks the cysteine residues that are required for formation of an oxygen-sensitive iron-sulfur cluster in some other members of the FNR family. Also, NarR lacks a crucial residue involved in interactions of this family of regulators with the sigma(70) subunit of RNA polymerase, indicating that a different mechanism is used to promote transcription. narR is also found in Paracoccus denitrificans, indicating that this species contains at least three FNR homologues.