H-NS inhibits transcription by forming repressing nucleoprotein complexes next to promoters. We investigated repression by binding of H-NS within the transcription unit using the bgl and proU operons. Repression of both operons requires a downstream regulatory element (DRE) in addition to an upstream element (URE). In bgl, H-NS binds to a region located between 600 to 700 bp downstream of the transcription start site, whereas in proU the DRE extends up to position +270. We show that binding of H-NS to the bgl-DRE inhibits transcription initiation at a step before open complex formation, as shown before for proU. This was shown by determining the occupancy of the bgl transcription unit by RNA polymerases, expression analysis of bgl and proU reporter constructs, and chloroacetaldehyde footprinting of RNA polymerase promoter complexes. The chloroacetaldehyde footprinting also revealed that RNA polymerase is "poised" at the osmoregulated sigma70-dependent proU promoter at low osmolarity, whereas at high osmolarity poising of RNA polymerase and repression by H-NS are reduced. Furthermore, repression by H-NS via the URE and DRE is synergistic, and the efficiency of repression by H-NS via the DRE inversely correlates with the promoter activity. Repression is high for a promoter of low activity, whereas it is low for a strong promoter. Inefficient repression of strong promoters by H-NS via a DRE may account for high induction levels of proU at high osmolarity and for bgl upon disruption of the URE.