Expression of the L-arabinose BAD operon in Escherichia coli is regulated by AraC protein which acts both positively in the presence of arabinose to induce transcription and negatively in the absence of arabinose to repress transcription. The repression of the araBAD promoter is mediated by DNA looping between AraC protein bound at two sites near the promoter separated by 210 base pairs, araI and araO2. In vivo and in vitro experiments presented here show that an AraC dimer, with binding to half of araI and to araO2, maintains the repressed state of the operon. The addition of arabinose, which induces the operon, breaks the loop, and shifts the interactions from the distal araO2 site to the previously unoccupied half of the araI site. The conversion between the two states does not require additional binding of AraC protein and appears to be driven largely by properties of the protein rather than being specified by the slightly different DNA sequences of the binding sites. Slight reorientation of the subunits of AraC could specify looping or unlooping by the protein. Such a mechanism could account for regulation of DNA looping in other systems.