The lac operon in E. coli consists of three genes1 (lacZ, lacY and lacA) transcribed from a single promoter. The lacZ gene encodes the enzyme β-galactosidase, an enzyme that cleaves β-galactosides. Lactose is a typical β-galactoside and the enzyme cleaves the disaccharide converting it to separate molecules of glucose and galactose. These monosacharides can enter into the metabolic pool of the cell where they can serve as the sole source of carbon.
Thus, when the lac operon is active and β-galactosidase is present, E. coli can grow on lactose as its only source of carbon. Outside of the laboratory, E. coli rarely encountered lactose (until recently) but there are many plant β-galactosides that are substrates for the enzyme.
LacY encodes a famous transporter called lactose permease. It is responsible for importing βgalactosides. The lacA gene encodes a transacetylase that is responsible for detoxifying the cell when it takes up poisonous β-galactosides.
Transcription begins at the Plac promoter and ends at a terminator at the 3′ end of the operon. Each of the three reading frames is translated separately from the polycistronic mRNA.
Upstream of the lac operon is the lacI gene. It encodes the lac repressor, one of the proteins that controls expression of the lac operon. The lacI gene is transcribed from its own promoter and it has its own terminator. (It is not necessary for the lacI gene to be linked to the operon.)
Expression of β-galactosidase, lac permease, and the transacetylase is regulated at the level of transcription. RNA polymerase binds to the lac promoter but this is a weak σ70 promoter.2. The promoter sequence is a poor match to the consensus sequence for these types of promoters so the operon is transcribed infrequently in the absence of additional activators. Transcription of the operon is activated by cAMP regulatory (or receptor) protein (CRP).3
In the absence of any β-galactoside, the operon is not transcribed and no enzyme is synthesized. Transcription is prevented by lac repressor, which binds to two operator sequences called O1 and O2. When β-galactosides are present repression is relived and the operon is transcribed at a low level in order to take advantage of the carbon source. When there is no other carbon source available, the operon is activated by CRP and the rate of transcription—and enzyme production—increases considerably.
1. This is one of the exceptions to the standard definition of a gene [What Is a Gene?]. In this case we are using the word "gene" to mean the coding region for a particular protein.
2. There are many different promoters in the E. coli genome. They are recognized by various RNA polymerase complexes containing different bound activators. One set of common activators is called σ factors: σ70 is the most common σ factor. Most genes have a σ70 promoter.
3. CRP is also known as catabolite activator protein (CAP).