The synthesis of Rhizobium meliloti Nod signal molecules, encoded by the nod gene products, is finely regulated. A negative control of plasmid-borne nod gene expression is provided by the NolR repressor encoded by the chromosomal nolR gene. NolR was previously shown to downregulate the expression of the activator nodD1 gene and the common nodABC operon by binding to an overlapping region of the two promoters adjacent to the n1 nod-box (Kondorosi et al., 1989). We demonstrate here that NolR also controls the expression of two additional genes, nodD2 and nodM, but does not directly regulate the expression of the host-specific nod genes located downstream of the n2, n3 and n5 nod-boxes. Thus, the nod genes are differentially regulated by NolR and only those providing common nodulation functions, by determining the synthesis of the core Nod factor structure, are subjected to this negative regulation. Furthermore, NolR has a strong negative effect on the production of Nod metabolites, the level of which may serve as a fine-tuning mechanism for optimal nodulation, specific to host-plant genotypes. In addition, it elicits preferential synthesis of Nod factors carrying unsaturated C16 fatty acids. Expression of nolR was high both in the free-living bacterium and in the bacteroid and it was downregulated by its own product and by the nod gene inducer luteolin.