Escherichia coli has the ability to respond to stress such as starvation in a very efficient manner. Under conditions of starvation wherein a novel substrate is provided as a sole nutritional source, Spontaneous mutants arise in a population of E.Coli that are able to utilize this novel carbon Many generic systems, upon mutational activation, have been shown to allow E.coli to Grow on novel substrates. . Wildtype E.coli is not able to utilize cellobiose, a disaccharide of glucose, as a carbon source. However after prolonged incubation with cellobiose as a sole carbon source, spontaneous Cel+ mutants can be isolated. The Cel+ derivatives have mutations in the chb operon involved in the utilization of N-N-diacetylchitobiose, a disaccharide of N-acetyl glucosamine. The chb operon of E.coli is comprised of six ORFs (chbBCARFG) with a ~200bp regulatory region (chbOP); chbBCA encode the IIB, IIC and IIA domains of the PTS-dependent permease respectively, chbR encodes for a dual function activator/repressor, chbF encodes the phopho-chitobiase and chbG codes for a protein of unknown function. It has been shown that the three proteins ChbR, CAP and NagC regulate the expression of the chb operon. ChbR along with CAP activates the chb operon in the presence of chitobiose. In the absence of the inducer, ChbR, along with NagC, represses the chb operon. Activation of the chb operon allowing utilization of cellobiose was earlier shown to occur either via insertion of IS1, IS2 or IS5 into the regulatory region (chbOP) upstream of the transcription start site or by base substitutions in chbR. Comparison of the chb operon sequence obtained from various Cel+ mutants with E.coli K12 genome sequence showed many differences. These differences were clustered in both the permease (chbBCA) as well as the enzyme (chbF) of the chb operon, suggesting that mutations are needed in all the ORFs of this operon in order to alter the specificity of E.coli towards utilization of cellobiose. The main objective of this thesis is to elucidate the mechanism of mutational activation of the chb operon of E.coli to allow utilization of cellobiose. These studies have shown that two classes of mutations, those that abrogate repression by NagC and those that alter the regulation by ChbR, together are necessary and sufficient to confer a Cel+ phenotype to E.coli. These studies also show that the wildtype permease and phospho-â -glucosidase are able to recognize and cleave cellobiose. Initial experiments were designed to study the role of independent mutational events of either insertion within the regulatory region or loss-of-function of chbR in conferring E.coli a Cel+ phenotype. The single mutational event of either the insertion within the regulatory region chbOP that disrupts the strong NagC binding site (mimicking an IS element) or knockout of chbR did not confer on E.c oli a Cel+ phenotype. However the presence of the artificial insertion within chbOP accelerated the process of obtaining Cel+ mutants suggesting a positive role for insertion elements. The apparent inability of the chbR knockout strain to mutate to Cel+ suggested that chbR is essential for acquisition of a Cel+ phenotype. Reporter gene assays showed that the presence of an insertion within chbOP enhances the promoter activity marginally. The role of chbR as a repressor was further ascertained by increased promoter activity seen from wildtype chbOP-lacZ fusion in a chbR knockout strain. A marginal enhancement in promoter activity in the presence of cellobiose in a strain carrying a wildtype chbR as compared to chbR knockout strain suggested an additional positive role of chbR. The inability of cellobiose to produce an inducing signal necessary for activation by wildtype ChbR protein suggested that gain-of-function mutations within chbR locus might play a crucial role in acquisition of cellobiose utilization phenotype by E.coli. The chbR clones obtained from various Cel+ mutants could activate transcription from the chb promoter at a higher level in the presence of cellobiose. However this activation was seen only in a strain carrying disruptions of the chromosomal nagC and chbR loci. These transformants also showed a Cel+ phenotype on the MacConkey cellobiose medium suggesting that the wildtype permease and enzyme upon induction could recognise, transport and cleave cellobiose, respectively. This was confirmed by cloning the wildtype genes encoding the permease and phospho-â -glucosidase under a heterologous promoter (Plac). The wildtype E.coli strain transformed with a plasmid carrying the genes could utilize cellobiose efficiently. Large scale isolation of Cel+ mutants was undertaken. Variation in the ability of cellobiose utilization was observed among the different mutants. Several Cel+ mutants retained the ability to utilize chitobiose. Cel+ mutants lacking insertions within chbOP contained a loss-of-function mutation at the nagC locus. The sequencing of the chbR locus from Cel+ mutant strains showed a single basepair change at the DNA level translating into a single amino acid change when compared to the Cel- counterpart. Nucleotide sequence of chbR obtained from two Cel+ natural isolates of E.coli also showed a single base mutation. The chbR clones from the two mutants, when transformed into a strain carrying disruptions at the chromosomal nagC and chbR loci, conferred it a Cel+ phenotype. Initial characterization of one of the mutant ChbR (N238S) was carried out. Reporter assays in a strain containing a wildtype copy of chbR at the genomic locus and a disruption of nagC showed that the wildtype ChbR is dominant over the mutant ChbR (N238S). The biochemical investigations of the wildtype and mutant ChbR (N238S) were undertaken. Wildtype ChbR showed non-specific binding to chbOP that could not be competed out by excess cold DNA. DNaseI protection assays confirmed that wildtype ChbR formed a relatively nonspecific complex with chbOP as compared to mutant ChbR (N238S). Finally DNaseI footprinting experiments showed that mutant ChbR (N238S) binds the specific direct repeat within chbOP better than the wildtype protein. These results indicated that mutant ChbR (N238S) has lost its ability to repress transcription by its inability to bind chbOP non-specifically. In addition, the mutant ChbR (N238S) has acquired the ability to activate transcription in the presence of cellobiose. This could be partly mediated via enhanced binding of the mutant ChbR (N238S) to the specific DNA binding site within chbOP in contrast to its wildtype counterpart. To conclude, this work has shown that acquisitive evolution of E.coli towards utilization of cellobiose in laboratory conditions alters the regulation of the chb operon and allows it to acquire new metabolic capability for utilizing cellobiose under selective pressure.