A-factor, containing a gamma-butyrolactone in its structure, is an autoregulatory factor or a 'microbial hormone' controlling secondary metabolism and cellular differentiation in Streptomyces griseus. A-factor exerts its regulatory role by binding to a specific receptor protein which, in the absence of A-factor, acts as a repressor-type regulator for morphological and physiological differentiation. In the signal relay leading to streptomycin production in S. griseus, the A-factor signal is transferred from the A-factor receptor to the upstream activation sequence of a regulatory gene, strR, in the streptomycin biosynthetic gene cluster via an A-factor-dependent protein that serves as a transcription factor for strR. The StrR protein thus induced appears to activate the transcription of other streptomycin-production genes. The presence of A-factor homologues in a wide variety of Streptomyces species and distantly related bacteria implies the generality of gamma-butyrolactones as chemical cellular signalling molecules in microorganisms.