Genome sequencing of Streptomyces coelicolor A3(2) revealed an uncharacterized type I polyketide synthase gene cluster (cpk). Here we describe the discovery of a novel antibacterial activity (abCPK) and a yellow-pigmented secondary metabolite (yCPK) after deleting a presumed pathway-specific regulatory gene (scbR2) that encodes a member of the gamma-butyrolactone receptor family of proteins and which lies in the cpk gene cluster. Overproduction of yCPK and abCPK in a scbR2 deletion mutant, and the absence of the newly described compounds from cpk deletion mutants, suggest that they are products of the previously orphan cpk biosynthetic pathway in which abCPK is converted into the yellow pigment. Transcriptional analysis suggests that scbR2 may act in a negative feedback mechanism to eventually limit yCPK biosynthesis. The results described here represent a novel approach for the discovery of new, biologically active compounds.