Formation of araB-lacZ hybrid coding sequences normally utilizes the DNA rearrangement activities of transposable bacteriophage Mu. Fusion events are physiologically specific: they do not occur during normal growth but are found at high rates following starvation. This system is a prime example of inducible genetic changes now called "directed mutation." We have developed a detailed molecular explanation of the complex series of biochemical events that produce ara-lac fusions. The cAMP-CRP catabolite sensory system and the CLP heat-shock protease play essential roles in Mu activation during starvation. PCR technology has been validated for the detection of rare fusion events, and there is evidence for no-fusion rearrangements after stress. Thus, the ara- lac fusion system is one of the best-characterized physiologically regulated mutational systems. Genetic studies and molecular experiments are outlined here to define the roles of the cAMP-CRP and CLP systems in Mu activation, to identify alternative biochemical pathways to fusion formation, and to clarify the nature of Mu-dependent DNA rearrangements following stress. %%% The results of this research will provide definitive answers to several issues in the directed mutation controversy and identify components of the signal transduction network connecting cellular physiology and DNA biochemistry.