The E. coli lac operator and repressor were adapted for function in mammalian cells. Plasmids containing an SV40 early region (pSVlacO) or a chloramphenicol acetyl transferase gene (pSVlacOCAT) linked to a hybrid SV40 early promoter bearing a lac operator were tested for function. Identical plasmids lacking an operator (pX-8 and pX-8CAT) were controls. In vitro, early transcription from pSVlacO, but not from pX-8, was inhibited by lac repressor, and repression was overcome by IPTG. Repression of large T synthesis or CAT activity occurred in vivo only when the respective operator-containing plasmid was cotransfected with a plasmid encoding lac repressor, or when the recipient cells stably synthesized lac repressor. IPTG substantially relieved repression in both cases. CAT enzyme repression was paralleled by a decrease in CAT mRNA abundance. Thus regulatory elements of the lac operon function physiologically in mammalian cells.