Lactose acts as an inducer in Lac operon by binding to the repressor protein, the repressor protein is produced by the inhibitory gene (LacI) present upstream to the operon gene. The repressor protein binds to the operator (O) (a segment of DNA present on the gene present upstream of the operon), The repressor protein is produced continuously (constitutively) in absence of Lactose in the nutrient medium. So a negligible amount of other proteins from the Z,Y and A genes are produced. When the cell is placed in a Lactose rich medium, Lactose is transported through the membrane with the help of permease into the cell which is then converted to allolactose that binds to the repressor protein, and prevents it from binding to the operator, thereby inducing the expression of the Lac operon