Rapamycin is an important macrocyclic polyketide produced by Streptomyces hygroscopicus and showing immunosuppressive, antifungal, and antitumor activities as well as displaying anti-inflammatory and neuroregenerative properties. The immense pharmacological potential of rapamycin has led to the production of an array of analogues, including through genetic engineering of the rapamycin biosynthetic gene cluster. This cluster contains several putative regulatory genes. Based on DNA sequence analysis, the products of genes rapH and rapG showed high similarities with two different families of transcriptional activators, LAL and AraC, respectively. Overexpression of either gene resulted in a substantial increase in rapamycin biosynthesis, confirming their positive regulatory role, while deletion of both from the chromosome of S. hygroscopicus resulted in a complete loss of antibiotic production. Complementation studies indicated an essential role of the RapG regulator for rapamycin biosynthesis and a supportive role of RapH. A direct effect of rapH and rapG gene products on the promoter of the rapamycin polyketide synthase operon, rapA-rapB, was observed using the chalcone synthase gene rppA as a reporter system.