The nosiheptide resistance gene (nshR) and a putative regulatory gene (nshA) are found together on a 2326 bp BamHI-PstI DNA fragment isolated from Streptomyces actuosus ATCC 25421. The putative regulatory gene, nshA, situated upstream from the nosiheptide resistance gene in the 2326 bp DNA fragment, contains apparent DNA-binding and RNA-binding domains. Interruption of nshA in the chromosome of S. actuosus alters nosiheptide production, suggesting that nshA is involved in regulation of nosiheptide biosynthesis. Two transcription initiation sites were found upstream of nshA as demonstrated by high-resolution S1 nuclease mapping. A weak transcription start site for nshR was found which initiated transcription from the first nucleotide of the open reading frame. Although a stem-loop structure with apparent termination activity was found between nshA and nshR, readthrough of transcription between nshA and nshR was demonstrated by S1 nuclease mapping of the 3' terminus of the nshA transcript. Time-course S1 experiments of the three promoters (nshA-pl, nshA-p2, nshR-p) indicated highly regulated differential expression of the promoters. nshA-p2 is a strong, constitutive promoter whereas 30% of the total nshA-p1/p2 transcript reads through the terminator and into the nshR gene, accounting for more than half of the total steady-state nshR transcript. The implications of the regulation of nshA and nshR gene expression, as well as the expression of two other linked genes, are presented.