Purified BlaI, the putative repressor of the β‐lactamase operon in Staphylococcus aureus, binds specifically to two regions of dyad symmetry (operators) located in the blaZ–blaR1 intergenic region. BlaI binds with similar affinity to the two regions and to the related sequence upstream of the mec gene found in methicillin‐resistant strains of S. aureus, providing physical evidence for the cross‐talk previously observed between these systems. A change from a lysine in the N‐terminus of BlaI to an alanine or deletion of the C‐terminal 23 amino acids severely reduces its DNA‐binding ability, demonstrating the functional importance of both the N‐ and C‐termini. An operator DNA–protein complex observed with crude cell lysates from repressed cells, indistinguishable from that observed with purified BlaI, was eliminated by induction of the β‐lactamase operon. Furthermore, BlaI is proteolytically cleaved in response to the addition of inducer in a blaR1‐dependent manner, providing primary evidence for the molecular basis of induction. Thus, BlaI is shown to be the repressor of the β‐lactamase system.