The production of diphtheria toxin and siderophore by the Corynebacterium diphtheriae regulatory mutant C7(beta)hm723 is resistant to the inhibitory effects of iron, and the mutant strain is defective for function of the regulatory gene dtxR. A 2.8-kb HindIII fragment carrying the C7(beta)hm723 dtxR allele was cloned and characterized in Escherichia coli. The restriction endonuclease maps of the 2.8-kb HindIII fragment from C7(beta)hm723 and the corresponding fragment from wild-type C. diphtheriae C7 were identical. RNA dot blot analysis with total RNA isolated from wild-type C. diphtheriae C7 and C7(beta)hm723 indicated that the dtxR gene was transcribed at very low but equivalent levels in both strains and was not regulated by iron. beta-Galactosidase synthesis from a tox-lacZ translational fusion construct in E. coli in high-iron medium was not repressed by the C7(beta)hm723dtxR allele, but was strongly repressed by the wild-type dtxR gene. The 28- to 29-kDa polypeptide expressed from the mutant dtxR allele in E. coli had the same electrophoretic mobility as the wild-type dtxR gene product in sodium dodecyl sulfate-polyacrylamide gel electrophoresis. The nucleotide sequence of the coding region and the 5' upstream region of the C7(beta)hm723 dtxR allele was determined and compared with the wild-type nucleotide sequence. The dtxR allele from C7(beta)hm723 contained a single-base change located 140 nucleotides from the 5' start of the gene, which resulted in replacement of arginine in the wild-type sequence by histidine in the mutant protein. These data demonstrate that C7(beta)hm723 expresses a mutant DtxR repressor protein that is severely defective in repressor activity.