Initiation of transcription of the lac operon by RNA polymerase (R) is inhibited by binding of lac repressor (L) to an operator site which overlaps the lac promoter (P). We have investigated repression of the lac UV5 promoter in vitro for a choice of the repressor--operator binding constant and ranges of thermodynamic activities of L and R which appear to be relevant in vivo. Effects of [L] on the extent of formation and the kinetics of association and dissociation of abortively-initiating open complexes (RPinit) were examined using fluorescence detected abortive initiation and KMnO4 chemical probing. The nitrocellulose filter assay was used to measure the dissociation rate constant and the equilibrium constant for binding for L to its operator site in the absence of R. For the chosen solution conditions, we find that both the observed velocity of abortive RNA oligomer synthesis and the KMnO4 reactivities of bases in the open region are functions of [L] and [R], demonstrating that formation of both RPinit and the repressor-operator complex (PL) are reversible processes under these conditions, and requiring the use of a relaxation-to-equilibrium analysis to interpret the kinetics. The agreement between dissociation rate constants of RPinit when challenged with either lac repressor or heparin, and the dependences on [L] and [R] of abortive synthesis velocities at binding equilibrium and of relaxation rate constants for reversible formation of RPinit from PL, all provide evidence for a simple competition mechanism. In this mechanism, and in contrast to recent proposals from other laboratories, lac repressor inhibits formation of RPinit and hence the observed rate of abortive product synthesis by reducing the equilibrium extent of formation of the first closed complex (RPc1), without affecting either the nature of RPinit or steps in formation of RPinit from RPc1.