Bacteria have developed an epigenetic phase variation mechanism to control cell surface pili-adhesin complexes between heritable expression (phase ON) and nonexpression (phase OFF) states. In the pyelonephritis-associated pili (pap) system, global regulators [catabolite gene activator protein (CAP), leucine-responsive regulatory protein (Lrp), DNA adenine methylase (Dam)] and local regulators (PapI and PapB) control phase switching. Lrp binds cooperatively to three pap DNA binding sites, sites 1-3, proximal to the papBA pilin promoter in phase OFF cells, whereas Lrp is bound to sites 4-6 distal to papBA in phase ON cells. Two Dam methylation targets, GATC(prox) and GATC(dist), are located in Lrp binding sites 2 and 5, respectively. In phase OFF cells, binding of Lrp at sites 1-3 inhibits methylation of GATC(prox), forming the phase OFF DNA methylation pattern (GATC(dist) methylated, GATC(prox) nonmethylated). Binding of Lrp at sites 1-3 blocks pap pili transcription and reduces the affinity of Lrp for sites 4-6. Together with methylation of GATC(dist), which inhibits Lrp binding at sites 4-6, the phase OFF state is maintained. We hypothesize that transition to the phase ON state requires DNA replication to dissociate Lrp and generate a hemimethyated GATC(dist) site. PapI and methylation of GATC(prox) act together to increase the affinity of Lrp for sites 4-6. Binding of Lrp at the distal sites protects GATC(dist) from methylation, forming the phase ON methylation pattern (GATC(dist) nonmethyated, GATC(prox) methylated). Lrp binding at sites 4-6 together with cAMP-CAP binding 215.5 bp upstream of the papBA transcription start, is required for activation of pilin transcription. The first gene product of the papBA transcript, PapB, helps maintain the switch in the ON state by activating papI transcription, which in turn maintains Lrp binding at sites 4-6.