Microbes can tailor transcriptional responses to diverse environmental challenges despite having streamlined genomes and a limited number of regulators. We present data‐driven models that capture the dynamic interplay of the environment and genome‐encoded regulatory programs of two types of prokaryotes: Escherichia coli (a bacterium) and Halobacterium salinarum (an archaeon). The models reveal how the genome‐wide distributions of cis‐acting gene regulatory elements and the conditional influences of transcription factors at each of those elements encode programs for eliciting a wide array of environment‐specific responses. We demonstrate how these programs partition transcriptional regulation of genes within regulons and operons to re‐organize gene–gene functional associations in each environment. The models capture fitness‐relevant co‐regulation by different transcriptional control mechanisms acting across the entire genome, to define a generalized, system‐level organizing principle for prokaryotic gene regulatory networks that goes well beyond existing paradigms of gene regulation. An online resource (http://egrin2.systemsbiology.net) has been developed to facilitate multiscale exploration of conditional gene regulation in the two prokaryotes.