MelR is an Escherichia coli transcription factor belonging to the AraC family. It activates expression of the melAB operon in response to melibiose. Full-length MelR (MelR303) binds to two pairs of sites upstream of the melAB transcription start site, denoted sites 1' and 1 and sites 2 and 2', and to a fifth site, R, which overlaps the divergent melR promoter. The C-terminal domain of MelR (MelR173) does not activate transcription. Here we show that, like MelR303, when MelR173 binds to sites 1 and 2 it recruits CRP to bind between these sites. Hence, the C-terminal domain is involved in heterologous interactions. MelR173 binds to the R site, which has 11 of 18 bp identical to sites 1 and 2 but, surprisingly, does not bind to site 1', which has 12 of 18 bp identical, nor to site 2'. Using electrophoretic mobility shift assays, we show that the binding of MelR303 to sites 1' and 2' is due to cooperative binding with the adjacent site. This homologous cooperativity requires the N-terminal domain of the protein. Activation of the melAB promoter requires MelR to occupy site 2', which overlaps the -35 hexamer. Hence, both domains of MelR are required for transcription activation.