The FNR protein of Escherichia coli controls the transcription of target genes in response to anoxia. The anaerobic incorporation of oxygen-sensitive [4Fe 4S] clusters promotes dimerization, which in turn enhances DNA binding. Four potential iron ligands (C20, C23, C29 and C122) are essential for normal FNR activity in vivo. Three FNR variants (C20S, C23G and C29G) retained the ability to incorporate oxygensensitive [4Fe 4S] clusters and to bind target DNA with essentially unimpaired affinity, suggesting that their failure to function normally in vivo resides at a later stage in the signal transduction pathway. The C122 variant failed to assemble iron-sulphur clusters and to bind DNA. Second-site substitutions that partially restore activity to FNR(C20S) were generated by error-prone polymerase chain reaction and were located in the dimer interface, in the activating regions (AR1, 2 or 3) or close to C122. Substitutions at E47, R48, E123, 1124, E127 or T128 allowed the extent of the FNR AR2 surface to be defined. Only one revertant, FNR(C20S Y69F G149S), specifically corrected the C20S defect. It was concluded that [4Fe 4S] cluster acquisition, dimerization and DNA binding are not sufficient to confer transcription regulatory activity on FNR: the iron-sulphur cluster must also be correctly liganded in order to establish effective activating contacts between FNR and RNA polymerase.