We previously reported (Liang, and., He, J.-S., and Fulco, A. J. (1995) J. Biol. Chem. 270, 4438-4450) that Bm3R1, a repressor regulating the expression of P450(BM-3) in Bacillus megaterium, could bind to Barbie box sequences in the 5'-flanking regions of barbiturate inducible genes. We've now shown that pentobarbital does not inhibit in vitro binding of Bm3R1 to the P450(BM-3) and P450(BM-3) Barbie boxes (BB3 and BB1), although the palindromic operator sequence (O-III) of P450(BM-3) did have a strong competitive effect on such binding. G39E-Bm3R1, a mutant of Bm3R1, did not bind to either Barbie box. In the presence of Bm3R1, portions of the regulatory regions of P450(BM-3) and P450(BM-1) were protected from DNase I digestion. These included 11 of the 15 base pairs of BB3 plus 7 base pairs 3' to BB3, BB1 plus 16 base pairs 3' to BB1, and, in the 5'-flanking region of P450(BM-1), segments covering most of two palindromic sequences (O-II and O-III) of 24 and 52 base pairs. These DNase I-protected regions (including O-III) showed considerable sequence identity, especially in a conserved poly(A) motif. Barbiturates did not inhibit binding of Bm3R1 to O-I . O-II in vitro while G39E-Bm3R1 did not bind. The regulatory effects of Bm3R1 on P450(BM-1) and P450(BM-3) were also evaluated in vivo using heterologous chloramphenicol acetyltransferase constructs and Western blotting. In the G39E mutant strain, both P450(BM-1) and P450(BM-3) were constitutively expressed, and the regulatory proteins Bm1P1 and Bm3P1, although still pentobarbital-inducible, had significantly higher basal levels of synthesis, In toto, our results show that Bm3R1 represses both P450(BM-1) and P450(BM-3) expression and that it may effect this by coordinate binding to operator and Barbie box sequences to produce looping of the P450(BM-1) and P450(BM-3) regulatory regions through protein-protein interaction.