In the model of the A-factor (2-isocapryloyl-3R-hydroxymethyl-gamma-butyrolactone) regulatory cascade in Streptomyces griseus, A-factor binds ArpA, the A-factor receptor protein, that has bound to the adpA promoter and dissociates it from the DNA, thus inducing the transcription of adpA. AdpA switches on the transcription of a number of genes required for secondary metabolism and morphological differentiation, forming an AdpA regulon. Consistent with this model, arpA null mutants produced streptomycin and a yellow pigment in larger amounts and formed aerial hyphae from an earlier growth stage than the wild-type strain. On the other hand, mutant MK2, expressing a mutant ArpA (Trp119Ala), neither produced secondary metabolites nor formed aerial hyphae, because this A-factor-insensitive mutant ArpA always bound to and repressed the adpA promoter due to the amino acid replacement of Trp-119 with Ala. Introduction of adpA under the control of a foreign promoter into mutant MK2 restored all of the phenotypes that we could observe, which suggests that the only significant target of ArpA is adpA. In contrast to other gamma-butyrolactone regulatory systems, disruption of arpA had no effect on A-factor production, indicating that ArpA does not regulate A-factor biosynthesis. Instead, A-factor production was found to be repressed by AdpA in a two-step regulatory feedback loop.