Borrelia burgdorferi (Bb), the agent of Lyme disease, exists in nature through a complex enzootic life cycle that involves both ticks and mammals. As Bb transitions between its two diverse niches, profound adaptive changes occur that are reflected in differential patterns of gene expression, particularly involving lipoprotein genes. Using a mutagenesis approach, we show that Rrp2 (gene BB0763), one of the proteins predicted by the Bb genome (www.tigr.org) to be a response regulator of a two-component sensory transduction system, is a pivotal regulator governing the expression of major membrane lipoproteins such as OspC, DbpA, and Mlp8, as well as many other mammalian infection-associated immunogens of Bb. Sequence analysis additionally suggested that Rrp2 is a bacterial enhancer-binding protein, essential for σ⁵⁴-dependent gene activation. Mutagenesis of a key amino acid residue within a putative activation domain revealed that Rrp2 controlled lipoprotein expression by governing the expression of the alternative σ-factor σ^s in a σ⁵⁴-dependent manner. We therefore propose a signal transduction pathway involving Rrp2, σ⁵⁴, and σ^s, which in concert control the expression of key lipoproteins and other infection-associated immunogens in Bb.