A model is proposed for the structure of stereospecific sites in regulatory proteins. On its basis a possible code is suggested that governs the binding of regulatory proteins at specific control sites on DNA. Stereospecific sites of regulatory proteins are assumed to contain pairs of antiparallel polypeptide chain segments which form a right-hand twisted antiparallel beta-sheet, with single-stranded regions at the ends of the beta-structure. The model predicts that binding reaction between a regulatory protein and double-helical DNA is a cooperative phenomenon and is accompanied by significant structural alteration at the stereospecific site of the protein. Half of hydrogen bonds normally existing in beta-structure are broken upon complex formation with DNA and a new set of hydrogen bonds is formed between polypeptide amide groups and DNA base pairs. In a stereospecific site, one chain (t-chain) is attached through hydrogen bonds to the carbonyl oxygens of pyramides and N3 adenines lying in one DNA strand, while the second polypeptide chain (g chain) is hydrogen bonded to the 2-amino groups of guanine residues lying in the opposite DNA strand. The amide groups serve as specific reaction sites being hydrogen bond acceptors in g-chain and hydrogen bond donors in t-chain. The single-stranded portions of t- and g-chains lying in neighbouring subunits of regulatory protein interact with each other forming deformed beta-sheets. The recognition of regulatory sequences by proteins is based on the structural complementarity between stereospecific sites of regulatory proteins and base pairs sequences at the control sites. An essential feature of these sequences is the asymmetrical distribution of guanine residues between the two DNA strands. The code predicts that there are six fundamental amino acid residues (serine, threonine, asparagine, histidine, glutamine and cysteine) whose sequence in stereospecific site determines the base pair sequence to which a given regulatory protein would bind preferentially. The code states a correspondence between four amino acid residues at the stereospecific site of regulatory protein with the two residues being in t- and g-segments, respectively, and AT(GC) base pair at the control site. It is thus possible to determine which amino acid residues in the repressor and which base pairs in the operator DNA are involved in specific interactions with each other, as exemplified by lac repressor binding to lac operator.