Previously, we identified evolutionarily derived changes in the pattern of nuclear factor binding to overlapping sites (termed A, B, and C, in proximal to distal order) within the promoter region of the murine D7Rp2e gene. In Mus domesticus, strong binding occurs at site B, with weak binding at sites A and C; in M. pahari, strong binding is observed at sites A and C, with weak binding at site B. The M. pahari-specific occupancy pattern is associated with repression of transcription. Presently, we have identified two interspecies changes, a single A --> G substitution within site B and a 7-bp indel within site C, that are primary determinants of the interspecies differences. These mutations alter both the pattern of binding site occupancy and the ability to repress transcription. The results are discussed in terms of a model involving a dynamic equilibrium between states of binding site occupancy, the nature of which can be modified during evolution.