Lsr2 is a small, basic protein present in Mycobacterium and related actinomycetes. Our previous in vitro biochemical studies showed that Lsr2 is a DNA-bridging protein, a property shared by H-NS-like proteins in gram-negative bacteria. Here we present in vivo evidence based on genetic complementation experiments that Lsr2 is a functional analog of H-NS, the first such protein identified in gram-positive bacteria. We show that lsr2 can complement the phenotypes related to hns mutations in Escherichia coli, including beta-glucoside utilization, mucoidy, motility, and hemolytic activity. We also show that Lsr2 binds specifically to H-NS-regulated genes and the repression of hlyE by Lsr2 can be partially eliminated by overexpression of slyA, suggesting that the molecular mechanisms of Lsr2 repression and depression are similar to those of H-NS. The functional equivalence of these two proteins is further supported by the ability of hns to complement the lsr2 phenotype in Mycobacterium smegmatis. Taken together, our results demonstrate unequivocally that Lsr2 is an H-NS-like protein.