Growing cultures of Bacillus subtilis bifurcate into subpopulations of motile individuals and non-motile chains of cells that are differentiated at the level of gene expression. The motile cells are ON and the chaining cells are OFF for transcription that depends on RNA polymerase and the alternative sigma factor σD. Here we show that chaining cells were OFF for σD-dependent gene expression because σD levels fell below a threshold and σD activity was inhibited by the anti-sigma factor FlgM. The probability that σD exceeded the threshold was governed by the position of the sigD gene. The proportion of ON cells increased when sigD was artificially moved forward in the 27 kb fla/che operon. In addition, we identified a new σD-dependent promoter that increases sigD expression and may provide positive feedback to stabilize the ON state. Finally, we demonstrate that ON/OFF motility states in B. subtilis are a form of development because mosaics of stable and differentiated epigenotypes were evident when the normally dispersed bacteria were forced to grow in one dimension.