AdpA in the A-factor regulatory cascade in Streptomyces griseus activates a number of genes required for secondary metabolism and morphological differentiation, forming an AdpA regulon. The Streptomyces subtilisin inhibitor (SSI) gene, sgiA, in S. griseus was transcribed in response to AdpA, showing that sgiA is a member of the AdpA regulon. AdpA bound a single site upstream of the sgiA promoter at approximately position -70 with respect to its transcriptional start point. Mutational analysis of the AdpA-binding site showed that the AdpA-binding site was essential for transcriptional activation. Mutants in which sgiA was disrupted had higher trypsin, chymotrypsin, metalloendopeptidase, and total protease activities than the wild-type strain, which showed that SgiA modulated the activities of these extracellularly produced proteases. Because a number of genes encoding chymotrypsins, trypsins, and metalloendopeptidases, most of which are SSI-sensitive proteases, are also under the control of AdpA, the A-factor regulatory cascade was thought to play a crucial role in modulating the extracellular protease activities by triggering simultaneous production of the proteases and their inhibitor at a specific timing during growth. Mutants in which sgiA was disrupted grew normally and formed aerial hyphae and spores with the same time course as the wild-type strain. However, exogenous addition of purified SgiA to substrate mycelium grown on agar medium resulted in a delay in aerial mycelium formation, indicating that SgiA is involved in aerial hypha formation in conjunction with proteases.