PhoP is a response regulator of the PhoQ-PhoP two-component system controlling a set of the Mg(II)-response genes in Escherichia coli. Here we demonstrate the mode of transcription regulation by phosphorylated PhoP of divergently transcribed mgtA and treR genes, each encoding a putative Mg(II) transporter and a repressor for the trehalose utilization operon respectively. Under Mg(II)-limiting conditions in vivo, two promoters, the upstream constitutive P2 and the downstream inducible P1, were detected for the mgtA gene. Gel-shift analysis in vitro using purified PhoP indicates its binding to a single DNA target, centred between -43 and -24 of the mgtAP1 promoter. This region includes the PhoP box, which consists of a direct repeat of the heptanucleotide sequence (T)G(T)TT(AA). Site-directed mutagenesis studies indicate the critical roles for T (position 3), T (position 4) and A (position 6) for PhoP-dependent transcription from mgtAP1. DNase I footprinting assays reveal weak binding of PhoP to this PhoP box, but the binding becomes stronger in the simultaneous presence of RNA polymerase. Likewise the RNA polymerase binding to the P1 promoter becomes stronger in the presence of PhoP. For the PhoP-assisted formation of open complex at the mgtAP1 promoter, however, the carboxy-terminal domain of alpha subunit (alpha CTD) is not needed. For transcription in vivo of the treR gene, four promoters were identified. The most upstream promoter treRP4 divergently overlaps with the mgtAP1 promoter, sharing the same sequence as the respective -10 signal in the opposite direction. In vitro transcription using mutant promoters support this prediction. In the presence of PhoP, transcription from the promoter treRP3 was repressed with concomitant activation of mgtAP1 transcription. The PhoP box is located between -46 and -30 with respect to treRP3, and the alpha CTD is needed for this repression.