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When lactose is present, allolactose binds to the lac repressor, causing an allosteric change in its shape. In its changed state, the lac repressor is unable to bind tightly to its cognate operator. This effect is referred to as induction, because it induces, rather than represses, expression of the metabolic genes.
Three lactose metabolism genes (lacZ, lacY, and lacA) are organized together in a cluster called the lac operon. The coordinated transcription and translation of the lac operon structural genes is supported by a shared promoter, operator, and terminator.