Gal or Lac repressor binding to an upstream DNA segment, in the absence of DNA looping, represses the P1 promoter located on the same face and activates the P2 promoter situated on the opposite face of the DNA helix in the gal operon. Both inhibition and stimulation of transcription requires the physical presence of the C-terminal domain of the alpha subunit of RNA polymerase although the latter is not required for transcription itself. We propose that Gal and Lac repressors inhibit or stimulate transcription initiation by disabling or stimulating RNA polymerase activity at a post-binding step by directly or indirectly altering the C-terminal alpha domain to an unfavorable state at P1 or a more favorable state at P2, respectively.