The mxi-spa locus on the virulence plasmid of Shigella flexneri encodes components of the type III secretion system. mxiE, a gene within this locus, encodes a protein that is homologous to the AraC/XylS family of transcriptional regulators, but currently its role in pathogenesis remains undefined. We characterized the virulence phenotype of a nonpolar mxiE mutant and found that this mutant retained the ability to invade mammalian cells in tissue culture and secrete Ipas (type III effectors required for host cell invasion), although it was less efficient than wild-type Shigella at cell-to-cell spread. Despite its invasive properties in culture, the mxiE mutant was completely avirulent in an animal model. Potential targets for MxiE activation were identified by using promoter-green fluorescent protein fusions, and gene expression was examined under various growth conditions. Six MxiE-regulated genes were discovered: ospB, ospC1, ospE2, ospF, virA, and ipaH(9.8). Notably, activation of these genes only occurred within the intracellular environment of the host and not during growth at 37 degrees C in liquid culture. Interestingly, all of the MxiE-regulated proteins previously have been shown to be secreted through the type III secretion system and are putative virulence factors. Our findings suggest that some of these Osp proteins may be involved in postinvasion events related to virulence. Since bacterial pathogens adapt to multiple environments during the course of infecting a host, we propose that Shigella evolved a mechanism to take advantage of a unique intracellular cue, which is mediated through MxiE, to express proteins when the organism reaches the eukaryotic cytosol.