Gram-positive bacteria of the genus Streptomyces are industrially important microorganisms, producing >70% of commercially important antibiotics. The production of these compounds is often regulated by low-molecular-weight bacterial hormones called autoregulators. Although 60% of Streptomyces strains may use γ-butyrolactone-type molecules as autoregulators and some use furan-type molecules, little is known about the signaling molecules used to regulate antibiotic production in many other members of this genus. Here, we purified a signaling molecule (avenolide) from Streptomyces avermitilis--the producer of the important anthelmintic agent avermectin with annual world sales of $850 million--and determined its structure, including stereochemistry, by spectroscopic analysis and chemical synthesis as (4S,10R)-10-hydroxy-10-methyl-9-oxo-dodec-2-en-1,4-olide, a class of Streptomyces autoregulator. Avenolide is essential for eliciting avermectin production and is effective at nanomolar concentrations with a minimum effective concentration of 4 nM. The aco gene of S. avermitilis, which encodes an acyl-CoA oxidase, is required for avenolide biosynthesis, and homologs are also present in Streptomyces fradiae, Streptomyces ghanaensis, and Streptomyces griseoauranticus, suggesting that butenolide-type autoregulators may represent a widespread and another class of Streptomyces autoregulator involved in regulating antibiotic production.