MOTIVATION: In order to understand transcription regulation in a given prokaryotic genome, it is critical to identify operons, the fundamental units of transcription, in such species. While there are a growing number of organisms whose sequence and gene coordinates are known, by and large their operons are not known. RESULTS: We present a probabilistic approach to predicting operons using Bayesian networks. Our approach exploits diverse evidence sources such as sequence and expression data. We evaluate our approach on the Escherichia coli K-12 genome where our results indicate we are able to identify over 78% of its operons at a 10% false positive rate. Also, empirical evaluation using a reduced set of data sources suggests that our approach may have significant value for organisms that do not have as rich of evidence sources as E.coli. AVAILABILITY: Our E.coli K-12 operon predictions are available at http://www.biostat.wisc.edu/gene-regulation.