The expression of pyelonephritis-associated pili (Pap) in uropathogenic Escherichia coli is epigenetically controlled by a reversible OFF to ON switch. In phase OFF cells, the global regulator Lrp is bound to pap sites proximal to the pilin promoter, whereas in phase ON cells, Lrp is bound to promoter distal sites. We have found that the local regulator PapI increases the affinity of Lrp for the sequence "ACGATC," which contains the target "GATC" site for DNA adenine methylase (Dam) and is present in both promoter proximal and distal sites. Mutational analyses show that methylation of the promoter proximal GATC(prox) site by Dam is required for transition to the phase ON state by specifically blocking PapI-dependent binding of Lrp to promoter proximal sites. Furthermore, our data support the hypothesis that PapI-dependent binding of Lrp to a hemimethylated GATC(dist) site generated by DNA replication is a critical component of the switch mechanism.