The overall topology of DNA profoundly influences the regulation of transcription and is determined by DNA flexibility as well as the binding of proteins that induce DNA torsion, distortion, and/or looping. Gal repressor (GalR) is thought to repress transcription from the two promoters of the gal operon of Escherichia coli by forming a DNA loop of approximately 40 nm of DNA that encompasses the promoters. Associated evidence of a topological regulatory mechanism of the transcription repression is the requirement for a supercoiled DNA template and the histone-like heat unstable nucleoid protein (HU). By using single-molecule manipulations to generate and finely tune tension in DNA molecules, we directly detected GalR/HU-mediated DNA looping and characterized its kinetics, thermodynamics, and supercoiling dependence. The factors required for gal DNA looping in single-molecule experiments (HU, GalR and DNA supercoiling) correspond exactly to those necessary for gal repression observed both in vitro and in vivo. Our single-molecule experiments revealed that negatively supercoiled DNA, under slight tension, denatured to facilitate GalR/HU-mediated DNA loop formation. Such topological intermediates may operate similarly in other multiprotein complexes of transcription, replication, and recombination.