RNaseIII is a double-strand specific endoribonuclease that has different functions in E. coli. It processes rRNA precursors for efficient maturation into ribosomes. It processes some mRNAs either to activate gene expression or to reduce gene expression. It regulates mRNA degradation. The int gene of phage Lambda is transcribed from two promoters yeilding different mRNA transcripts. Int expression from one is reduced by RNaseIII; from the other, expression is enhanced. In both cases, control of expression by RNaseIII occurs from a single site beyond the gene. This form of control is named retroregulation. The site present on the RNA is able to form a special stem and loop structure that is recognized by RNaseIII. In order to understand how RNaseIII levels in the cells are modulated, its gene in E. coli, rnc, has been cloned on Lambda vectors and on pBR322 plasmid. Sequence analysis indicates a second gene in an operon with rnc. This gene produces a protein with significant homologies to the yeast ras genes and is called era (E. coli ras). Both rnc and era have been placed on expression vectors and their proteins have been purified and antibodies made. Preliminary evidence suggests that era is an essential gene in E. coli and that the protein binds GTP.