In Streptomyces griseus, A-factor (2-isocapryloyl-3R-hydroxymethyl-gamma-butyrolactone) switches on aerial mycelium formation and secondary metabolite biosynthesis. An A-factor-dependent transcriptional activator, AdpA, activates multiple genes required for morphological development and secondary metabolism in a programmed manner. A region upstream of a zinc-containing metalloendopeptidase gene (sgmA) was found among the DNA fragments that had been isolated as AdpA-binding sites. The primary product of sgmA consisted of N-terminal pre, N-terminal pro, mature, and C-terminal pro regions. sgmA was transcribed in an AdpA-dependent manner, and its transcription was markedly enhanced at the timing of aerial mycelium formation. AdpA bound two sites in the region upstream of the sgmA promoter; one was at about nucleotide position -60 (A site) with respect to the transcriptional start point of sgmA, and the other was at about position -260 (B site), as determined by DNase I footprinting. Transcriptional analysis with mutated promoters showed that the A site was essential for the switching on of sgmA transcription and that the B site was necessary for the marked enhancement of transcription at the timing of aerial mycelium formation. Disruption of the chromosomal sgmA gene resulted in a delay in aerial hypha formation by half a day. SgmA is therefore suggested to be associated with the programmed morphological development of Streptomyces, in which this peptidase, perhaps together with other hydrolytic enzymes, plays a role in the degradation of proteins in substrate hyphae for reuse in aerial hypha formation.