The genome of Escherichia coli harbors several catabolic operons involved in the utilization of a wide variety of natural compounds as carbon sources. The chitobiose (chu) operons of E.coli Is involved in the utilization of chitobiose(disaccharide of N-acety1-D-glucosamine) and cellbiose (disaccharide of glucose) derived from the two most abundant naturally occurring carbon sources on earth, chitin and cellulose respectively. The operon consists of the chbBCARFG genes coding for transport, regulation and hydrolysis functions required to utilize these compounds; the chuyBCA genes code for a multi-subuni PTS transporter ; the chuR codes for a dual function repressor/activator of the operon; the chbF codes for a phospho-glucosidase and the chbG codes for a protein of unknown function. The chu operon Is regulated by three transcription factors; NagC, a key regulator of the nag genes involved in amino sugar metabolism; ChbR, a dual function operon-specific regulator; and CRP_cAMP. The operon is repressed by NagC and ChbR in the absence of catabolic substrate. In the presence of chitobiose, expression is induced by the abrogation of NagC-mediated repression by GlcNAc-6-P generated by the hydrolysis of chitobiose-6-P and subsequent activation of transcription by ChbR and CPR-cAMP. Wild type E.coli connot utilize cellbiose due to the inability of cellbiose to induce expression from the operon. The simultaneous presence of a loss of function mutation in nagC and a gain –of-function mutation in chbR is necessary and sufficient to allow cellbiose to induce expression and confer on E.coli the ability to utilize cellbiose. The activation step by ChbR and CPR-cAMP requires an inducer that is recognized by ChbR. The chemical identity of the inducer and the mechanism of transcriptional activation by ChbR and CPR-cAMP are not understood. The studies described in the chapter 2 shows that chbG is essential for the utilization of the acetylated sugars chitobiose and chitotriose while it is dispensable for the sugars lacking the acety1group such as cellobiose and chitosan dimer, a disaccharide of N-glucosamine. ChbG is produced as a cytosolic protein and removes one acety1 group from chitobiose and chitotriose thus shows a mono-decetylase activity. Taken together, the observing suggest that ChbG deacetylates chitobiose-6-P and chitotriose-6-P producing the mono-decetylated from of the sugars. The deacetylateion is necessary for their recognition both as inducers by ChbR to activate transcription along with CRP-cAMP and as substractes by phosop-glucosidase ChbF. Cellobiose positive(Cel+) mutants carrying nagC delection and different gain-of-function mutations in chbR are independent of chbG for induction by chitobiose suggesting that the mutations in ChbR can allow it to recognize the acetylated form of chitobiose-6-P. Despite normal induction, the mutants to grow on chitobiose without chbG are consistant with the requirement of deacetylation for hydrolysis by ChbF. The prediction active site of chbG was validated by demonstrating the loss of chbG function upon alanine substitution of the putative metal binding residues. Vibro cholerace ChbG can complement the function of E.coli ChbG indicating that ChbG is conserved in both the organisms. The studies presented in chapter 3 address the mechanism of transcriptional activation of the chb operon by ChbR and CPR-cAMP. ChbR and CPR-cAMP function in a synergistic manner in response to the induction signal. The synergy is not because of their cooperative binding to the DNA. The role of CRP as a class I activator via the known mechanism involving interaction between the Activation region1 (AR1) and the C-terminal domain of the alpha subunit of RNA polymerase (CTD) was not crucial for the chb operon. A direct interaction between the two activators in virto was observed. Based on these results and the close spacing of the synergy is due to interaction between the two regulators bound to DNA that is enhanced in the presence of the inducer, binding about an optimal confirmation in ChbR required to interact with RNA polymerase. ChbR contacts different residues in the subunit in response to cellbiose and chitobiose; whereas it utilizes the known residues in the presence cellbiose, it appears to require different and unknown residues for induction in the presence of chitobiose. In conclusion, the studies reported in chapter 2 and 3 provide an understanding of the regulation of the chitin oligosaccharides utilization in E.coli at different levels. The broad implications of these studies and possible future directions are discussed in chapter 4. ChbG is an evolutionary conserved protein found in both prokaryotes and enkayotes including humans. ChbG homologs have been implicated in inflammatory bowel disorders in humans and development in metazoans. Therefore, the studies on chbG described in this thesis have been broader significance.