<jats:title>ABSTRACT</jats:title><jats:p>In<jats:italic>Streptomyces coelicolor</jats:italic>,<jats:italic>bldG</jats:italic>encodes a putative anti-anti-sigma factor that regulates both aerial hypha formation and antibiotic production, and a downstream transcriptionally linked open reading frame (<jats:italic>orf3</jats:italic>) encodes a putative anti-sigma factor protein. A cloned DNA fragment from<jats:italic>Streptomyces clavuligerus</jats:italic>contained an open reading frame that encoded a protein showing 92% identity to the<jats:italic>S. coelicolor</jats:italic>BldG protein and 91% identity to the BldG ortholog in<jats:italic>Streptomyces avermitilis</jats:italic>. Sequencing of the region downstream of<jats:italic>bldG</jats:italic>in<jats:italic>S. clavuligerus</jats:italic>revealed the presence of an open reading frame encoding a protein showing 72 and 69% identity to the ORF3 proteins in<jats:italic>S. coelicolor</jats:italic>and<jats:italic>S. avermitilis</jats:italic>, respectively. Northern analysis indicated that, as in<jats:italic>S. coelicolor</jats:italic>, the<jats:italic>S. clavuligerus bldG</jats:italic>gene is expressed as both a monocistronic and a polycistronic transcript, the latter including the downstream<jats:italic>orf3</jats:italic>gene. High-resolution S1 nuclease mapping of<jats:italic>S. clavuligerus bldG</jats:italic>transcripts revealed the presence of three<jats:italic>bldG</jats:italic>-specific promoters, and analysis of expression of a<jats:italic>bldGp-egfp</jats:italic>reporter indicated that the<jats:italic>bldG</jats:italic>promoter is active at various stages of development and in both substrate and aerial hyphae. A<jats:italic>bldG</jats:italic>null mutant was defective in both morphological differentiation and in the production of secondary metabolites, such as cephamycin C, clavulanic acid, and the<jats:italic>5S</jats:italic>clavams. This inability to produce cephamycin C and clavulanic acid was due to the absence of the CcaR transcriptional regulator, which controls the expression of biosynthetic genes for both secondary metabolites as well as the expression of a second regulator of clavulanic acid biosynthesis, ClaR. This makes<jats:italic>bldG</jats:italic>the first regulatory protein identified in<jats:italic>S. clavuligerus</jats:italic>that functions upstream of CcaR and ClaR in a regulatory cascade to control secondary metabolite production.