Restriction-modification (R-M) systems are highly prevalent among bacteria and archaea, and appear to play crucial roles in modulating horizontal gene transfer and protection against phage. There is much to learn about these diverse enzymes systems, especially their regulation. Type II R-M systems specify two independent enzymes: a restriction endonuclease (REase) and protective DNA methyltransferase (MTase). Their activities need to be finely balanced in vivo Some R-M systems rely on specialized transcription factors called C (controller) proteins. These proteins play a vital role in the temporal regulation of R-M gene expression, and function to indirectly modulate the horizontal transfer of their genes across the species. We report novel regulation of a C-responsive R-M system that involves a C protein of a poorly-studied structural class - C.Csp231I. Here, the C and REase genes share a bicistronic transcript, and some of the transcriptional auto-control features seen in other C-regulated R-M systems are conserved. However, separate tandem promoters drive most transcription of the REase gene, a distinctive property not seen in other tested C-linked R-M systems. Further, C protein only partially controls REase expression, yet plays a role in system stability and propagation. Consequently, high REase activity was observed after deletion of the entire C gene, and cells bearing the ΔC R-M system were outcompeted in mixed culture assays by those with the WT R-M system. Overall, our data reveal unexpected regulatory variation among R-M systems.