When glucose is low, have lactose at high concentration. Repressor binds lactose, falls off operator, RNA polymerase transcribes genes. Activator protein (CAP) binds near promoter and gene is on. cAMP binds to CAP and activates so it can bind to promoter. When glucose is high and lactose is high, CAP protein can't bind to cAMP when glucose is present. Can't recruit RNA polym, and genes can't be turned on. Glucose is preferential to lactose due to CAP protein and cAMP can't bind when glucose is present. Adenyl cyclase is present, you can make cAMP, genes are turned on. When glucose is high, adenyl cyclase is inhibited, can't make cAMP, CAP can't bond, no transcription.