The lac repressor functions through a mechanism known as allosteric regulation. In the absence of lactose, the repressor binds tightly to the operator region, blocking RNA polymerase. When lactose is present, it is converted to allolactose, which binds to the repressor and induces a conformational change. This change reduces the repressor's affinity for the operator, allowing RNA polymerase to transcribe the genes required for lactose metabolism.