Transcription from nitrogen-regulated promoters, such as glnAp2, requires the glnG gene product, NRI, as well as the rpoN(glnF) gene product, sigma60, and is regulated by the glnL gene product, NRII. We find that in a reaction mixture containing NRI, NRII, and ATP, NRII catalyzes the transfer of the gamma phosphate of ATP to NRI. This covalent modification of NRI occurs concurrently with the acquisition of the ability by the reaction mixture to activate transcription from glnAp2. In the presence of PII, the product of glnB, NRII catalyzes the removal of the phosphate from NRI-phosphate. This reaction occurs concurrently with the loss by the reaction mixture of the ability to activate transcription from glnAp2. On the basis of this evidence, we propose that NRI-phosphate activates transcription from nitrogen-regulated promoters and that the role of NRII is control of the formation and breakdown of NRI-phosphate in response to cellular signals of nitrogen availability.