Integration host factor (IHF), which is a histone-like protein, has been shown to positively regulate transcription in two different ways. It can either help the formation of a complex between a transcription factor and RNA polymerase or it can itself activate RNA polymerase without the involvement of other transcription factors. In this study, we present a third mechanism for IHF-stimulated gene expression, by counteracting the repression by another histone-like protein, H-NS. The early (Pe) promoter of bacteriophage Mu is specifically inhibited by H-NS, both in vivo and in vitro. For this inhibition, H-NS binds to a large DNA region overlapping the Pe promoter. Binding of IHF to a binding site just upstream of Pe alleviates the H-NS-mediated repression of transcription. This same ihf site is also involved in the direct activation of Pe by IHF. In contrast to the direct activation by IHF, however, the alleviating effect of IHF appears not to be dependent on the relevant position of the ihf site on the DNA helix, and it also does not require the presence of the C-terminal domain of the alpha subunit of RNA polymerase. Footprint analysis shows that binding of IHF to the ihf site destabilizes the interaction of H-NS with the DNA, not only in the IHF-binding region but also in the DNA regions flanking the ihf site. These results suggest that IHF disrupts a higher-order nucleoprotein complex that is formed by H-NS and the DNA.