Positive and negative regulatory elements involved in the synthesis of colanic acid, the capsular polysaccharide of Escherichia coli K-12, have been identified previously. RcsB, a positive regulator for transcription of the structural genes of colanic acid synthesis (cps), is a protein of about 26 kilodaltons which probably acts as a multimer, rcsC, which maps close to rcsB at 48 min on the E. coli chromosome, exerts a negative effect on expression of the structural genes and codes for a protein of about 100 kilodaltons. The two genes appear to be transcribed in opposite directions, with the C-terminal ends of the genes being less than 0.3 kilobases apart. Multicopy expression of rcsB is lethal in rcsC mutants which carry cps-lac fusions, probably owing to accumulation of intermediates in the capsule synthesis pathway in these cells. Examination of double mutants and cells carrying multicopy rcsB+ plasmids reveal an rcsA-independent pathway for capsule synthesis. We hypothesize that RcsC may act as an environmental sensor, transmitting information to the RcsB positive regulator.