Temperate bacteriophages possess a molecular switch, which regulates the lytic and lysogenic growth. The genomes of the temperate telomere phages N15, PY54 and ɸKO2 harbor a primary immunity region (immB) comprising genes for the prophage repressor, the lytic repressor and a putative antiterminator. The roles of these products are thought to be similar to those of the lambda proteins CI, Cro and Q, respectively. Moreover, the gene order and the location of several operator sites in the prototype telomere phage N15 and in ɸKO2 are also reminiscent of lambda-like phages. By contrast, in silico analyses revealed the presence of only one operator (OR3) in PY54. The purified PY54 Cro protein was used for EMSA studies demonstrating that it exclusively binds to a 16-bp palindromic site (OR3) upstream of the prophage repressor gene. The OR3 operator sequences of PY54 and ɸKO2/N15 only differ by their peripheral base pairs, which are responsible for Cro specificity. PY54 cI and cro transcription is regulated by highly active promoters initiating the synthesis of a homogenious species of leaderless mRNA. The location of the PY54 Cro binding site and of the identified promoters suggests that the lytic repressor suppresses cI transcription but not its own synthesis. The results indicate an unexpected diversity of the growth regulation mechanisms in lambda-related phages.