The iac locus is involved in indole-3-acetic acid (IAA) catabolism in Acinetobacter baumannii. Nine structural genes of iac are transcribed in the same direction, whereas iacR, which encodes a MarR-type transcriptional regulator, is transcribed in the opposite direction. The IacA protein, which is encoded by the second structural gene of the iac locus, is expressed in an IAA-dependent manner. Here, we characterized gene expression from this locus in wild type A. baumannii and in an iacR mutant; this revealed that the iacH promoter is negatively regulated by IacR. The transcriptional site of iacH was determined by using 5′ rapid amplification of cDNA ends; one IacR-binding site was identified between positions −35 and +28 of the iacH promoter. Sequence analysis and an electrophoretic mobility shift assay indicated that recombinant IacR binds specifically to a sequence with dyad symmetry in the iacR-iacH overlapping promoters in the absence of IAA. In addition, a two-plasmid expression system in Escherichia coli showed that IAA probably serves as a ligand that binds to IacR and releases it from the iacH promoter, thereby allowing RNA polymerase to transcribe iac. Thus, iac is expressed in order to promote IAA degradation, whereas free IacR is required for iac repression. We conclude that IacR serves as a key regulator of IAA degradation in A. baumannii in the rhizosphere. These results provide new insights into the possible role of A. baumannii in the environment.