Group I biotin protein ligases (BPLs) catalyze the covalent attachment of biotin to its cognate acceptor proteins. In contrast, Group II BPLs have an additional N-terminal DNA-binding domain and function not only in biotinylation but also in transcriptional regulation of genes of biotin biosynthesis and transport. Most bacteria contain only a single biotin protein ligase, whereas Clostridium acetobutylicum contains two biotin protein ligase homologs: BplA and BirA'. Sequence alignments showed that BplA is a typical group I BPL, whereas BirA' lacked the C-terminal domain conserved throughout extant BPL proteins. This raised the questions of why two BPL homologs are needed and why the apparently defective BirA' has been retained. We have used in vivo and in vitro assays to show that BplA is a functional BPL whereas BirA' acts as a biotin sensor involved in transcriptional regulation of biotin transport. We also successfully converted BirA' into a functional biotin protein ligase with regulatory activity by fusing it to the C-terminal domain from BplA. Finally, we provide evidence that BplA and BirA' interact in vivo.