Cells must balance the cost and benefit of protein expression to optimize organismal fitness. The lac operon of the bacterium Escherichia coli has been a model for quantifying the physiological impact of costly protein production and for elucidating the resulting regulatory mechanisms. We report quantitative fitness measurements in 27 redesigned operons that suggested that protein production is not the primary origin of fitness costs. Instead, we discovered that the lac permease activity, which relates linearly to cost, is the major physiological burden to the cell. These findings explain control points in the lac operon that minimize the cost of lac permease activity, not protein expression. Characterizing similar relationships in other systems will be important to map the impact of cost/benefit tradeoffs on cell physiology and regulation.