Final answer:
Regulatory genes control transcription but do not encode proteins; they are a key part of the operon system in prokaryotes, notably in the lac operon of E. coli. Transcription factors in both prokaryotes and eukaryotes are essential for gene regulation.
Step-by-step explanation:
The gene that regulates transcription but does not encode a protein is called a regulatory gene. In the context of prokaryotic cells, such as E. coli, these regulatory genes are part of the operon system. The lac operon in E. coli is a classic example, where the I gene encodes a repressor that can bind to the operator to prevent transcription.
However, transcription factors, enhancers, and repressors work together to regulate gene expression, with transcription factors being crucial for turning genes on and off. In eukaryotes, gene regulation is also influenced by epigenetics, which involves protein interactions affecting gene expression without altering the DNA itself.