The Restriction-modification system AhdI contains two convergent transcription units, one with genes encoding methyltransferase subunits M and S and another with genes encoding the controller (C) protein and the restriction endonuclease (R). We show that AhdI transcription is controlled by two independent regulatory loops that are well-optimized to ensure successful establishment in a naïve bacterial host. Transcription from the strong MS promoter is attenuated by methylation of an AhdI site overlapping the -10 element of the promoter. Transcription from the weak CR promoter is regulated by the C protein interaction with two DNA-binding sites. The interaction with the promoter-distal high-affinity site activates transcription, while interaction with the weaker promoter-proximal site represses it. Because of high levels of cooperativity, both C protein-binding sites are always occupied in the absence of RNA polymerase, raising a question how activated transcription is achieved. We develop a mathematical model that is in quantitative agreement with the experiment and indicates that RNA polymerase outcompetes C protein from the promoter-proximal-binding site. Such an unusual mechanism leads to a very inefficient activation of the R gene transcription, which presumably helps control the level of the endonuclease in the cell.