A DNA fragment stimulating actinorhodin, undecylprodigiosin, and A-factor production in Streptomyces lividans 66 was cloned from Streptomyces coelicolor A3(2). Nucleotide sequencing revealed the presence of an open reading frame of 225 codons, named afsQ1, that showed great similarity in amino acid sequence to the response regulators of typical prokaryotic two-component regulatory systems responsible for adaptive responses. The termination codon, TGA, of afsQ1 overlapped the initiation codon, GTG, of a second open reading frame, afsQ2, of 535 codons. The afsQ2 gene product showed homology with the sensory histidine protein kinases of two-component systems. In agreement with the assumption that the AfsQ1 and AfsQ2 proteins comprise an aspartate-histidine phosphotransfer system, an amino acid replacement from Asp to Glu at residue 52 of AfsQ1, generated by site-directed mutagenesis, resulted in loss of the protein's ability to stimulate antibiotic production in S. lividans. Primer extension experiments indicated that transcription of the afsQ1 and afsQ2 genes initiates at the translational start codon (GTG) of the afsQ1 gene. The afsQ1 and afsQ2 genes were physically mapped at a chromosomal position near the actinorhodin biosynthetic gene cluster (act) by hybridization to Southern blots of restriction fragments separated by pulsed-field gel electrophoresis. Disruption of either afsQ1 or afsQ2 on the S. coelicolor chromosome by use of phage phi C31KC515 led to no detectable change in secondary metabolite formation or morphogenesis. The afsQ1 gene on pIJ922 suppressed the S. coelicolor absA mutation and caused actinorhodin production but did not suppress the absB mutation. Southern blot hybridization showed that sequences homologous to afsQ1 and afsQ2 are present in almost all of the actinomycetes examined.