Final answer:
Co-activators enhance gene transcription by aiding the interaction between RNA polymerase and promoters, while co-repressors modulate repressor activity, as seen in the regulation of the tryptophan operon in prokaryotes.
Step-by-step explanation:
Co-activators can act as activators; they enhance the interaction between RNA polymerase and a particular promoter, facilitating gene transcription. Conversely, co-repressors can modulate the activity of repressors by binding to them and enabling them to inhibit gene expression by binding to the operator region of DNA. A notable example is the regulation of the tryptophan operon in prokaryotic cells, like E. coli, where tryptophan acts as a co-repressor. When tryptophan is abundant, it binds to the repressor protein, changing its shape so that it can attach to the operator site and block transcription of genes required for tryptophan synthesis, effectively turning off the operon in response to the environmental availability of this amino acid.