The Escherichia coli lac promoter has been shown to contain an RNA polymerase binding site (P2) that overlaps with, and is shifted 22 base-pairs upstream from the normal lac promoter (P1). In this paper, we provide RNA polymerase protection data obtained in vitro that show that, in the absence of CAP-cAMP, in vitro P2 is the preferred polymerase binding site on the P+ template. In the presence of CAP-cAMP, polymerase binding to P2 is reduced and more polymerase is bound at P1. Two lac P1 "-35 region" mutations, L157 and 4, which increase the homology between this region and the consensus "-10 region" sequence, are both shown to have an increased affinity for polymerase binding at P2. CAP-cAMP is also able to decrease the amount of polymerase bound to P2 and to increase the amount bound to P1 on these mutant promoter fragments. P2 does not initiate transcription efficiently in vivo. Nuclease S1 mapping experiments detect only a low level of transcription from one of the P2 "up" mutations, but no beta-galactosidase synthesis is directed by this mutant. Mutations such as L157 and 4, which alter the P2-10 region, also alter lac P sensitivity to CAP-cAMP in vivo, suggesting that the P2 sequence plays a role in CAP-cAMP regulation of lac P. Possible roles for P2 in vivo are discussed.