Cell-free extracts from Streptomyces clavuligerus, purified by elution from heparin-agarose with an ARE-containing DNA fragment or by salt elution chromatography, bind to a 26 nt ARE sequence, for butyrolactone receptor proteins (ARE(ccaR)). This sequence is [corrected] located upstream of the ccaR gene, encoding [corrected] the activator protein CcaR required for clavulanic acid and cephamycin C biosynthesis. The binding is specific for the ARE sequence as shown by competition with a 34 nt unlabelled probe identical to the ARE sequence. A brp gene, encoding a butyrolactone receptor protein, was cloned from S. clavuligerus. Sixty-one nucleotides upstream of brp another ARE sequence (ARE(brp)) was found, suggesting that Brp autoregulates its expression. Pure recombinant rBrp protein binds specifically to the ARE sequences present upstream of ccaR and brp. A brp-deleted mutant, S. clavuligerus Deltabrp::neo1, produced 150-300% clavulanic acid and 120-220% cephamycin C as compared with the parental strain, suggesting that Brp exerts a repressor role in antibiotic biosynthesis. EMSA assays using affinity chromatography extracts from the deletion mutant S. clavuligerus Deltabrp::neo1 lacked a high-mobility band-shift due to Brp but still showed a [corrected] slow-mobility band-shift observed in the wild-type strain. These results indicate that two different proteins bind specifically to the ARE sequence and modulate clavulanic acid and cephamycin C [corrected] biosynthesis by its action on ccaR gene expression.