Steady-state- and stress-induced expression of Escherichia coli heat-shock genes is regulated at the transcriptional level through controls of concentration and activity of the positive regulator, the heat-shock promoter-specific subunit of RNA polymerase, sigma 32. Central to these controls are functions of the DnaK, DnaJ, GrpE heat-shock proteins as negative modulators that mediate degradation as well as repression of activity and, in some conditions, of synthesis of sigma 32. DnaJ has a key role in modulation since it binds sigma 32 and, jointly with DnaK and GrpE, represses its activity. Furthermore, DnaJ is capable of binding heat-damaged proteins, targeting DnaK and GrpE to these substrates, and thereby mediating DnaK-, DnaJ-, GrpE-dependent repair. It is proposed that one important signal transduction pathway that converts stress to a heat-shock response relies on the sequestering of DnaJ through binding to damaged proteins which derepresses and stabilizes sigma 32. Damage repair ameliorates the inducing signal and frees DnaJ, DnaK, GrpE to shut off the heat-shock response.