<jats:p>Genome sequencing of <jats:italic>Streptomyces coelicolor</jats:italic> A3(2) revealed an uncharacterized type I polyketide synthase gene cluster (<jats:italic>cpk</jats:italic>). 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 (<jats:italic>scbR2</jats:italic>) that encodes a member of the <jats:italic>γ</jats:italic>-butyrolactone receptor family of proteins and which lies in the <jats:italic>cpk</jats:italic> gene cluster. Overproduction of yCPK and abCPK in a <jats:italic>scbR2</jats:italic> deletion mutant, and the absence of the newly described compounds from <jats:italic>cpk</jats:italic> deletion mutants, suggest that they are products of the previously orphan <jats:italic>cpk</jats:italic> biosynthetic pathway in which abCPK is converted into the yellow pigment. Transcriptional analysis suggests that <jats:italic>scbR2</jats:italic> 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.