In Escherichia coli, the expression of fatty acid metabolic genes is controlled by the transcription factor, FadR. The affinity of FadR for DNA is controlled by long chain acyl-CoA molecules, which bind to the protein and modulate gene expression. The crystal structure of FadR reveals a two domain dimeric molecule where the N-terminal domains bind DNA, and the C-terminal domains bind acyl-CoA. The DNA binding domain has a winged-helix motif, and the C-terminal domain resembles the sensor domain of the Tet repressor. The FadR.DNA complex reveals how the protein interacts with DNA and specifically recognizes a palindromic sequence. Structural and functional similarities to the Tet repressor and the BmrR transcription factors suggest how the binding of the acyl-CoA effector molecule to the C-terminal domain may affect the DNA binding affinity of the N-terminal domain. We suggest that the binding of acyl-CoA disrupts a buried network of charged and polar residues in the C-terminal domain, and the resulting conformational change is transmitted to the N-terminal domain via a domain-spanning alpha-helix.