Klebsiella pneumoniae can use urea as the sole source of nitrogen, thanks to a urease encoded by the ureDABCEFG operon. Expression of this operon is independent of urea and is regulated by the supply of nitrogen in the growth medium. When cells were growth rate limited for nitrogen, the specific activity of urease was about 70 times higher than that in cells grown under conditions of excess nitrogen. Much of this nitrogen regulation of urease formation depended on the nitrogen regulatory system acting through the nitrogen assimilation control protein, NAC. In a strain deleted for the nac gene, nitrogen limitation resulted in only a 7-fold increase in the specific activity of urease, in contrast to the 70-fold increase seen in that of the wild type. The ure operon was transcribed from two promoters. The proximal promoter (P1) had an absolute requirement for NAC; little or no transcription was seen in the absence of NAC. The distal promoter (P2) was independent of NAC, but its activity increased about threefold when the growth rate of the cells was limited by the nitrogen source. Transcriptional regulation of P1 and P2 accounted for most of the changes in urease activity seen under various nitrogen conditions. However, when transcription of ureDABCEFG was less than 20% of its maximum, the amount of active urease formed per transcript of ure decreased almost linearly with decreasing transcription. This may reflect a defect in the assembly of active urease and accounted for as much as a threefold activity difference under the conditions tested here. Thus, the ure operon was transcribed from a NAC-independent promoter (P2) and the most strongly NAC-dependent promoter known (P1). Most of the regulation of urease formation was transcriptional, but when ure transcription was low, assembly of active urease also was defective.