Pseudomonas aeruginosa is a well-known pathogen in chronic respiratory diseases such as cystic fibrosis. Infectivity of P. aeruginosa is related to the ability to grow under oxygen-limited conditions using the anaerobic metabolism of denitrification, in which nitrate is reduced to dinitrogen via nitric oxide (NO). Denitrification is activated by a cascade of redox-sensitive transcription factors, among which is the DNR regulator, sensitive to nitrogen oxides. To gain further insight into the mechanism of NO-sensing by DNR, we have developed an Escherichia coli-based reporter system to investigate different aspects of DNR activity. In E. coli DNR responds to NO, as shown by its ability to transactivate the P. aeruginosa norCB promoter. The direct binding of DNR to the target DNA is required, since mutations in the helix-turn-helix domain of DNR and specific nucleotide substitutions in the consensus sequence of the norCB promoter abolish the transcriptional activity. Using an E. coli strain deficient in haem biosynthesis, we have also confirmed that haem is required in vivo for the NO-dependent DNR activity, in agreement with the property of DNR to bind haem in vitro. Finally, we have shown, we believe for the first time, that DNR is able to discriminate in vivo between different diatomic signal molecules, NO and CO, both ligands of the reduced haem iron in vitro, suggesting that DNR responds specifically to NO.