Purified BlaI, the putative repressor of the beta-lactamase operon in Staphylococcus aureus, binds specifically to two regions of dyad symmetry (operators) located in the blaZ-blaR1 intergenic region. BlaI binds with similar affinity to the two regions and to the related sequence upstream of the mec gene found in methicillin-resistant strains of S. aureus, providing physical evidence for the cross-talk previously observed between these systems. A change from a lysine in the N-terminus of BlaI to an alanine or deletion of the C-terminal 23 amino acids severely reduces its DNA-binding ability, demonstrating the functional importance of both the N- and C-termini. An operator DNA-protein complex observed with crude cell lysates from repressed cells, indistinguishable from that observed with purified BlaI, was eliminated by induction of the beta-lactamase operon. Furthermore, BlaI is proteolytically cleaved in response to the addition of inducer in a blaR1-dependent manner, providing primary evidence for the molecular basis of induction. Thus, BlaI is shown to be the repressor of the beta-lactamase system.