The sensor kinase FixL and the response regulator FixJ induce the expression of the nitrogen fixation genes of Rhizobium meliloti in response to microaerobiosis, which is a characteristic feature of the plant root nodule interior where the bacteria fix nitrogen. The kinase activity of a purified, soluble derivative of the membrane-bound hemoprotein FixL, designated FixL*, is stimulated under low oxygen conditions, thus increasing FixJ-phosphate levels. FixJ-phosphate is a potent transcriptional activator of the nifA and fixK genes, the products of which, in turn, induce the expression of most if not all of the remaining nitrogen fixation genes. FixL* and FixL*-phosphate also dephosphorylate FixJ-phosphate, and this activity is depressed by low oxygen concentrations. In the current model, gene expression is reciprocally coordinated by the kinase and phosphatase activities of FixL according to changes in oxygen tension.