A-factor is a microbial hormone that functions as a key switch for secondary metabolite formation and morphogenesis in Streptomyces griseus. Genetic and biochemical studies on the A-factor-binding protein have implied that the binding protein present in the cytoplasm plays a role in repressing streptomycin (Sm) production and sporulation while the binding of A-factor to the binding protein releases this repression. The A-factor signal is transferred, probably via some additional regulatory proteins in the A-factor-regulatory cascade, to the strR gene, a regulator for Sm biosynthesis. A positive regulatory protein binds about 430-330 bp upstream from the transcription start point of the strR promoter and activates its transcription. The StrR product, in turn, activates the other Sm-biosynthesis genes. A global regulatory gene, afsR, of Streptomyces coelicolor A3(2) encodes a 993-amino acid protein that is phosphorylated by a specific phosphokinase, AfsK, encoded by the region just upstream from the afsR gene. Site-directed mutagenesis of afsR has revealed that phosphorylated AfsR globally stimulates transcription of antibiotic-production genes. It is most likely that AfsR and AfsK compose a two-component regulatory system. Although AfsR shows no significant homology with typical regulators of the two-component systems in other prokaryotes, such as OmpR and PhoB of Escherichia coli, it shows considerable homology with regulatory proteins in antibiotic biosynthetic gene clusters of Streptomyces spp., such as actII ORF4, dnrR1 ORF1 and redD ORF1.(ABSTRACT TRUNCATED AT 250 WORDS)