The goal of systems biology is to understand the behavior of the whole in terms of knowledge of the parts. This is hard to achieve in many cases due to the difficulty of characterizing the many constituents involved in a biological system and their complex web of interactions. The lac promoter of Escherichia coli offers the possibility of confronting "system-level" properties of transcriptional regulation with the known biochemistry of the molecular constituents and their mutual interactions. Such confrontations can reveal previously unknown constituents and interactions, as well as offer insight into how the components work together as a whole. Here we study the combinatorial control of the lac promoter by the regulators Lac repressor (LacR) and cAMP-receptor protein (CRP). A previous in vivo study [Setty Y, Mayo AE, Surette MG, Alon U (2003) Proc Natl Acad Sci USA 100:7702-7707] found gross disagreement between the observed promoter activities and the expected behavior based on the known molecular mechanisms. We repeated the study by identifying and removing several extraneous factors that significantly modulated the expression of the lac promoter. Through quantitative, systematic characterization of promoter activity for a number of key mutants and guided by the thermodynamic model of transcriptional regulation, we were able to account for the combinatorial control of the lac promoter quantitatively, in terms of a cooperative interaction between CRP and LacR-mediated DNA looping. Specifically, our analysis indicates that the sensitivity of the inducer response results from LacR-mediated DNA looping, which is significantly enhanced by CRP.