FadR is an acyl-CoA-responsive transcription factor, regulating fatty acid biosynthetic and degradation genes in Escherichia coli. The apo-protein binds DNA as a homodimer, an interaction that is disrupted by binding of acyl-COA: The recently described structure of apo-FadR shows a DNA binding domain coupled to an acyl-CoA binding domain with a novel fold, but does not explain how binding of the acyl-CoA effector molecule > 30 A away from the DNA binding site affects transcriptional regulation. Here, we describe the structures of the FadR-operator and FadR- myristoyl-CoA binary complexes. The FadR-DNA complex reveals a novel winged helix-turn-helix protein-DNA interaction, involving sequence-specific contacts from the wing to the minor groove. Binding of acyl-CoA results in dramatic conformational changes throughout the protein, with backbone shifts up to 4.5 A. The net effect is a rearrangement of the DNA binding domains in the dimer, resulting in a change of 7.2 A in separation of the DNA recognition helices and the loss of DNA binding, revealing the molecular basis of acyl-CoA-responsive regulation.