Recent studies on the regulation of phage phi29 gene expression reveal new ways to accomplish the processes required for the orderly gene expression in prokaryotic systems. These studies revealed a novel DNA-binding domain in the phage main transcriptional regulator and the nature and dynamics of the multimeric DNA-protein complex responsible for the switch from early to late gene expression. This review describes the features of the regulatory mechanism that leads to the simultaneous activation and repression of transcription, and discusses it in the context of the role of the topological modification of the DNA carried out by two phage-encoded proteins working synergistically with the DNA.