The polysaccharide capsule is the major virulence factor of Streptococcus pneumoniae (pneumococcus), a major human pathogen. The sequences in the promoter and coding regions of the capsule gene locus undergo extensive variations through the natural transformation-mediated horizontal gene transfer. The sequence variations in the coding region have led to at least 97 capsular serotypes. However, it remains unclear whether the sequence polymorphisms in the promoter region have any biological significance. In this study, we determined the sequences of the cps promoter region from 225 invasive pneumococcal isolates, and identified modular composition and remarkable inter-strain sequence variations in this region. The strain-to strain variations in the cps promoter are characterized by diversity in sequence and size, mosaic combinations of nucleotide polymorphisms and sequence modules, selective preservation of the sequence combinations, and promiscuous assortments of the sequences between the promoter and coding regions. Isogenic pneumococci carrying allelic variants of the cps promoter displayed significant differences in the transcription of the capsule genes, capsule production, adhesion to host epithelial cells, anti-phagocytosis and virulence in mouse bacteremia model. This study has thus indicated that the sequence polymorphisms in the cps promoter represent a novel mechanism for fine-tuning the level of encapsulation and virulence among S. pneumoniae strains.