The genome of Escherichia coli K-12 contains ten cryptic phages, altogether constituting about 3.6% of the genome in sequence. Among more than 200 predicted genes in these cryptic phages, 14 putative transcription factor (TF) genes exist, but their regulatory functions remain unidentified. As an initial attempt to make a breakthrough for understanding the regulatory roles of cryptic phage-encoded TFs, we tried to identify the regulatory function of CP4–6 cryptic prophage-encoded YagI with unknown function. After SELEX screening, YagI was found to bind mainly at a single site within the spacer of bidirectional transcription units, yagA (encoding another uncharacterized TF) and yagEF (encoding 2-keto-3-deoxy gluconate aldolase, and dehydratase, respectively) within this prophage region. YagEF enzymes are involved in the catabolism of xylose downstream from xylonate. We then designated YagI as XynR (regulator of xylonate catabolism), one of the rare single-target TFs. In agreement with this predicted regulatory function, the activity of XynR was suggested to be controlled by xylonate. Even though low-affinity binding sites of XynR were identified in the E. coli K-12 genome, they all were inside open reading frames, implying that the regulation network of XynR is still fixed within the CR4–6 prophage without significant influence over the host E. coli K-12.