Two regulatory genes, thnI and thnU, were identified in the thienamycin (thn) gene cluster from Streptomyces cattleya. ThnI resembles LysR-type transcriptional activators and ThnU belongs to the SARP family of transcriptional activators. Their functional role was established after independent inactivation by gene replacement together with transcriptional analysis involving reverse transcription polymerase chain reaction (RT-PCR). Deletion of thnI abolished thienamycin production showing its involvement in thienamycin biosynthesis. Gene expression analysis applied to the thn gene cluster demonstrated that ThnI is a transcriptional activator essential for thienamycin biosynthesis that regulates the expression of nine genes involved in thienamycin assembly and export (thnH, thnJ, thnK, thnL, thnM, thnN, thnO, thnP and thnQ). Unexpectedly, the thnU disrupted mutant was not affected in thienamycin production but turned out to be essential for cephamycin C biosynthesis. Transcript analysis applied to early and late structural genes for cephamycin C biosynthesis (pcbAB and cmcI), revealed that ThnU is the transcriptional activator of these cephamycin C genes although they are not physically linked to the thn cluster. In addition, it was shown that deletion of thnI has an upregulatory effect on pcbAB and cmcI transcription consistent with a significant increase in cephamycin C biosynthesis in this mutant.