Borrelia burgdorferi, the Lyme disease pathogen causes persistent infection by evading the host immune response. Differential expression of the surface-exposed lipoprotein VlsE that undergoes antigenic variation is a key immune evasion strategy employed by B. burgdorferi. Most studies focused on the mechanism of VlsE antigen variation, but little is known about VlsE regulation and factor(s) that regulates differential vlsE expression. In this study, we investigated BB0025, a putative YebC family transcriptional regulator (and hence designated BB0025 as YebC of B. burgdorferi herein). We constructed yebC mutant and complemented strain in an infectious strain of B. burgdorferi. The yebC mutant could infect immunocompromised SCID mice but not immunocompetent mice, suggesting that YebC plays an important role in evading host adaptive immunity. RNA-seq analyses identified vlsE as one of the genes whose expression was most affected by YebC. Quantitative RT-PCR and Western blot analyses confirmed that vlsE expression was dependent on YebC. In vitro, YebC and VlsE were co-regulated in response to growth temperature. In mice, both yebC and vlsE were inversely expressed with ospC in response to the host adaptive immune response. Furthermore, EMSA proved that YebC directly binds to the vlsE promoter, suggesting a direct transcriptional control. These data demonstrate that YebC is a new regulator that modulates expression of vlsE and other genes important for spirochetal infection and immune evasion in the mammalian host.