Chlamydiae are obligate intracellular bacteria which undergo a unique developmental cycle, alternating between non-replicative elementary bodies (EBs) and replicative reticulate bodies (RBs). The transition from RB to EB is characterized by condensation of the chromosome into a dense nucleoid structure. The chlamydial histone homologue Hc1 is sufficient to induce formation of a similar structure in Escherichia coli. High-level Hc1 expression in E. coli is self-limiting and down-regulates transcription, translation, and replication at concentrations similar to those observed in chlamydial elementary bodies. Expression of Hc1 at sub-structural levels may have specific regulatory functions through its interaction with chromosomal DNA. In E. coli this is reflected in a dramatic shift in the pattern of gene expression. The differential expression of the outer membrane porin proteins OmpC and OmpF and analysis of lacZ fusions with promoter regions sensitive to supercoiling suggests that low-level Hc1 expression results in a net relaxation of chromosomal DNA. Topological analysis of plasmid DNA from both E. coli and Chlamydia trachomatis supports a decrease in superhelicity preceding nucleoid formation. In vitro analysis of purified Hc1-DNA interactions supports preferential binding based upon DNA conformation. These results suggest a dual role in which Hc1-mediated changes in gene expression may precede metabolic inactivity.