The internal structures of the bacterial cell and the associated dynamic changes as a function of physiological state have only recently begun to be characterized. Here we explore two aspects of subcellular localization in E. coli cells: the cytoplasmic distribution of the response regulator OmpR and its regulated chromosomal genes, and the subcellular repositioning of chromosomal loci encoding membrane proteins upon induction. To address these questions by quantitative fluorescence microscopy, we developed a simple system to tag virtually any chromosomal location with arrays of lacO or tetO by extending and modifying existing tools. An unexplained subcellular localization was reported for a functional fluorescent protein fusion to the response regulator OmpR in Escherichia coli. The pronounced regions of increased fluorescence, or foci, are dependent on OmpR phosphorylation, and do not occupy fixed, easily identifiable positions, such as the poles or midcell. Here we show that the foci are due to OmpR-YFP binding specific sites in the chromosome. By measuring OmpR-YFP localization at the ompF and ompC promoters under increasing levels of OmpR phosphorylation, we demonstrate support for a model of hierarchical binding to these promoters. Our results explain the inhomogeneous distribution of OmpR-YFP fluorescence in cells and further demonstrate that for a transcription factor expressed at wild-type levels, binding to native sites in the chromosome can be imaged and quantified by fluorescence microscopy. It has long been hypothesized that subcellular positioning of chromosomal loci in bacteria may be influenced by gene function and expression state. Here we provide direct evidence that membrane protein expression affects the position of chromosomal loci for two different membrane proteins. In derived systems in which a cytoplasmic protein is produced, a shift was not observed. Antibiotics that block transcription and translation similarly prevented locus repositioning towards the membrane, suggesting that both transcription and translation of a membrane protein are required. We also found that repositioning occurs remarkably rapidly, and is observable within a few minutes following induction. As membrane protein encoding genes are distributed throughout the chromosome, this may reveal an important mechanism for maintaining the bacterial chromosome in an expanded and dynamic state.