Expression of the genes in the phosphate regulon, including the pstS (phoS) and phoB genes, is positively regulated by PhoB protein when phosphate is limited. We purified PhoB protein from overproducing cells and studied its interaction with the pstS gene. It binds specifically to the DNA fragment containing the promoter region of pstS. The transcription initiation site of the gene in vivo was identified by S1 nuclease mapping and primer-extension experiments. In-vitro transcription of pstS was activated by the PhoB protein, and the initiation site of transcription agreed with the in-vivo initiation site. Activation of in-vitro transcription by PhoB protein required both the normal sigma factor (sigma 70) and core RNA polymerase. PhoB protein binding sites on the promoter regions of pstS and phoB were determined by footprinting experiments with DNase I and a methylating agent. In both cases the protein binds to the pho box, the concensus sequence shared by regulatory regions of genes in the phosphate regulon. Our findings indicate that PhoB protein recognizes and binds to the pho box and activates transcription of the genes in the phosphate regulon.