Recent discoveries of activator proteins that distort DNA but bear no obvious activation domains have focused attention on the role of DNA structure in transcriptional regulation. Here we describe how the transcription factor MerR can mediate repression as well as activation through stereospecific modulation of DNA structure. The repressor form of MerR binds between the -10 and -35 promoter elements of the bacterial mercury-detoxification genes, PT, allowing RNA polymerase to form an inactive complex with PT and MerR at this stress-inducible promoter. Upon mercuric ion binding, Hg-MerR converts this polymerase complex into the transcriptionally active or 'open' form. We show here that MerR bends DNA towards itself in a manner similar to the bacterial catabolite-activator protein CAP, namely at two loci demarked by DNase I sensitivity, and that the activator conformation, Hg-MeR, relaxes these bends. This activator-induced unbending, when coupled with the previously described untwisting of the operator, remodels the promoter and makes it a better template for the poised polymerase.