Transcription factors in the bacterium E. coli are rarely essential, and when they are essential, they are largely toxin-antitoxin systems. While studying transcription factors encoded in horizontally acquired regions in E. coli , we realized that the protein RacR, a putative transcription factor encoded by a gene on the rac prophage, is an essential protein. Here, using genetics, biochemistry, and bioinformatics, we show that its essentiality derives from its role as a transcriptional repressor of the ydaS and ydaT genes, whose products are toxic to the cell. Unlike type II toxin-antitoxin systems in which transcriptional regulation involves complexes of the toxin and antitoxin, repression by RacR is sufficient to keep ydaS transcriptionally silent.