Differential gene expression in the mother cell chamber of sporulating cells of Bacillus subtilis is determined in part by an RNA polymerase sigma factor called sigma K (or sigma 27). The sigma K factor was assigned as the product of the sporulation gene spoIVCB on the basis of the partial aminoterminal amino acid sequence of the purified protein. The spoIVCB gene is now shown to be a truncated gene capable of specifying only the amino terminal half of sigma K. The carboxyl terminal half is specified by another sporulation gene, spoIIIC, to which spoIVCB becomes joined inframe at an intermediate stage of sporulation by site-specific recombination within a 5-base pair repeated sequence. Juxtaposition of spoIVCB and spoIIIC need not be reversible in that the mother cell and its chromosome are discarded at the end of the developmental cycle. The rearrangement of chromosomal DNA could account for the presence of sigma K selectively in the mother cell and may be a precedent for the generation of cell type-specific regulatory proteins in other developmental systems where cells undergo terminal differentiation.