The controller (C) proteins of a wide variety of restriction-modification (R-M) systems are thought to regulate expression of the endonuclease (R) gene by a genetic switch that ensures that methylation precedes endonuclease expression. Previous DNA footprinting experiments with C.AhdI have located the binding site upstream of the C and R genes in the AhdI R-M system, and the structure of C.AhdI has recently been determined. Here, we provide evidence that the binding site can accommodate either one or two dimers of C.AhdI in a concentration-dependent manner. The dimer binding site is adjacent to the -35 hexamer site required for the interaction with RNA polymerase (RNAP); however, co-operative binding of a second dimer blocks this site. Optimum DNA binding site sizes for dimer and tetramer formation were determined to be ca 21 bp and 34 bp, respectively. The stoichiometry and affinities of relevant DNA-protein complexes have been characterised by sedimentation velocity and EMSA using native and mutant promoter sequences. Molecular models of the dimer and tetramer complexes have been constructed that are consistent with the hydrodynamic data. Our results suggest a mechanism for both positive and negative regulation of endonuclease expression, whereby at moderate levels of C.AhdI, the protein binds to the promoter as a dimer and stimulates transcription by the interaction with RNAP. As the levels of C.AhdI increase further, binding of the second dimer competes with RNAP, thus down-regulating transcription of its own gene, and hence that of the endonuclease.