In Streptomyces sp. AJ9463, a producer of chitinase inhibitor allosamidin, allosamidin strongly enhances production of the chitinase mainly secreted to the culture broth in a chitin medium. To clarify the mechanism for regulation of the chitinase production by allosamidin, a disruption experiment of genes encoding proteins constructing a two-component regulatory system present at 5'-upstream region of the chitinase gene was performed. In the disruptant obtained, allosamidin could not promote the chitinase production, but N, N'-diacetylchitobiose, which also enhances production of the same chitinase more weakly than allosamidin, promoted the chitinase production similarly to the case observed in the wild-type strain. Furthermore, by the experiment in an inorganic salt solution, it was shown that allosamidin could not induce the chitinase production without addition of N, N'-diacetylchitobiose. These results show that allosamidin can activate transcription of the chitinase gene through the two-component regulatory system in the presence of N, N'-diacetylchitobiose.