Streptomycete antibiotic synthesis is coupled to morphological differentiation such that antibiotics are produced as a colony sporulates. Streptomyces coelicolor produces several structurally and genetically distinct antibiotics. The S. coelicolor absA locus was defined by four UV-induced mutations that globally blocked antibiotic biosynthesis without blocking morphological differentiation. We show that the absA locus encodes a putative eubacterial two-component sensor kinase-response regulator system. All four mutations lie within a single open reading frame, designated absA1, which is predicted to encode a sensor histidine kinase. A second gene downstream of absA1, absA2, is predicted to encode the cognate response regulator. In marked contrast to the antibiotic-deficient phenotype of the previously described absA mutants, the phenotype caused by disruption mutations in the absA locus is precocious hyperproduction of the antibiotics actinorhodin and undecylprodigiosin. Precocious hyperproduction of these antibiotics is correlated with premature expression of XylE activity in a transcriptional fusion to an actinorhodin biosynthetic gene. We propose that the absA locus encodes a signal transduction mechanism that negatively regulates synthesis of the multiple antibiotics produced by S. coelicolor.