The P22 c2 repressor protein (P22R) binds to DNA sequence-specifically and helps to directthe temperate lambdoid bacteriophage P22 to the lysogenic developmental pathway. We describe the 1.6Å X-ray structure of the N-terminal domain (NTD) of P22R in a complex with a DNA fragment containingthe synthetic operator sequence [d(ATTTAAGATATCTTAAAT)]2. This operator has an A-T base pairat position 9L and a T-A base pair at position 9R and is termed DNA9T. Direct readout: nondirectionalvan der Waals interactions between protein and DNA appear to confer sequence-specificity. The structureof the P22R NTD-DNA9T complex suggests that sequence-specificity arises substantially from lock-and-key interaction of a valine with a complementary binding cleft on the major groove surface of DNA9T.The cleft is formed by four methyl groups on sequential base pairs of 5'-TTAA-3'. The valine cleft isintrinsic to the DNA sequence and does not arise from protein-induced DNA conformational changes.Protein-DNA hydrogen bonding plays a secondary role in specificity. Indirect readout: it is known thatthe noncontacted bases in the center of the complex are important determinants of affinity. The proteininduces a transition of the noncontacted region from B-DNA to B'-DNA. The B' state is characterized bya narrow minor groove and a zigzag spine of hydration. The free energy of the transition from B- toB'-DNA is known to depend on the sequence. Thus, the observed DNA conformation and hydrationallows for the formulation of a predictive model of the indirect readout phenomenon.