Azorhizobium caulinodans ORS571 nifA regulation is partially mediated by the nitrogen regulatory gene ntrC. However, the residual nifA expression in ntrC mutant strains is still modulated by the cellular nitrogen and oxygen status. A second ntrC-homologous region, linked to ntrC, was identified and characterized by site-directed insertion mutagenesis and DNA sequencing. Tn5 insertions in this region cause pleiotropic defects in nitrogen metabolism and affect free-living as well as symbiotic nitrogen fixation. DNA sequencing and complementation studies revealed the existence of a bicistronic operon (ntrYX). NtrY is likely to represent the transmembrane 'sensor' protein element in a two-component regulatory system. NtrX shares a high degree of homology with NtrC proteins of other organisms and probably constitutes the regulator protein element. The regulation of the ntrYX and ntrC loci and the effects of ntrYX, ntrY and ntrX mutations on nifA expression were examined using beta-galactosidase gene fusions. NtrY/NtrX were found to modulate nifA expression and ntrYX transcription was shown to be partially under the control of NtrC.