The E. coli ada gene positively controls its own expression and that of other genes (alkA, alkB, aidB) involved in repair of DNA alkylation damage. The cloned ada and alkA genes and purified Ada protein have been used in cell-free systems to identify the inducing signal. Self-methylation of the Ada protein by transfer of a methyl group from a phosphotriester in alkylated DNA to a cysteine residue in the protein converts it to an activator of transcription. The covalently modified Ada protein binds specifically to promoter regions containing the sequence d(AAANNAAAGCGCA) immediately upstream of the RNA polymerase binding sites. This is apparently the first example of conversion of a regulatory gene product to a transcriptional activator by a posttranslational modification event.