The convergently transcribed restriction (R) and methylase (M) genes of the Restriction-Modification system Esp1396I are tightly regulated by a controller (C) protein that forms part of the CR operon. We have mapped the transcriptional start sites from each promoter and examined the regulatory role of C.Esp1396I in vivo and in vitro. C-protein binding at the CR and M promoters was analyzed by DNA footprinting and a range of biophysical techniques. The distal and proximal C-protein binding sites at the CR promoter are responsible for activation and repression, respectively. In contrast, a C-protein dimer binds to a single site at the M-promoter to repress the gene, with an affinity much greater than for the CR promoter. Thus, during establishment of the system in a naïve host, the activity of the M promoter is turned off early, preventing excessive synthesis of methylase. Mutational analysis of promoter binding sites reveals that the tetranucleotide inverted repeats long believed to be important for C-protein binding to DNA are less significant than previously thought. Instead, symmetry-related elements outside of these repeats appear to be critical for the interaction and are discussed in terms of the recent crystal structure of C.Esp139I bound to the CR promoter.