A 2.6-kb BamHI fragment from the genome of the wild-type, nikkomycin-producing strain of Streptomyces tendae ATCC 31160 was cloned and sequenced. This 2.6-kb BamHI fragment corresponds to the DNA site where transposon Tn4560 had inserted to create a nikkomycin-nonproducing mutant. A possible ORF of 660 nucleotides was found in this 2.6-kb BamHI fragment, in which the third base of each codon was either G or C in 92% of the codons. The deduced amino acid sequence coded by this ORF (TarA, tendae autoregulator receptor) shows strong homology with several gamma -butyrolactone-binding proteins that negatively regulate antibiotic production in other streptomycetes and have a helix-turn-helix DNA-binding motif. A portion (179 nucleotides) of tarA that encodes the helix-turn-helix motif was replaced with ermE, and wild-type S. tendae was transformed with this construct borne in pDH5, a gene-disruption vector. Southern hybridization indicated that ermE had inserted in the 2.6-kb BamHI region in one isolate that is erythromycin resistant. Northern hybridization indicated that tarA disruption significantly increased the amount of disrupted-tarA mRNA. This suggests that TarA negatively regulates its own synthesis. Nikkomycin production by the tarA disruptant was delayed but reached the wild-type level after longer incubation in production medium.