E. coli, remember, is a prokaryote; an organism whose cells lack a nucleus. Prokaryotic DNA is clustered into groups of genes called operons. When scientists first studied the lac operon found in E. coli, they observed gene regulation through transcriptional repression and induction.We've talked about repression and induction before. Repression describes a decrease in gene transcription, whereas induction is an increase in gene transcription.e call the individual genes structural genes. A structural gene is any gene that codes for a structural protein or an enzyme. Remember, enzymes are just one kind of protein. The structural genes in the lac operon code for three different enzymes.