The small number of reactant molecules involved in gene regulation can lead to significant fluctuations in intracellular mRNA and protein concentrations, and there have been numerous recent studies devoted to the consequences of such noise at the regulatory level. Theoretical and computational work on stochastic gene expression has tended to focus on instantaneous transcriptional and translational events, whereas the role of realistic delay times in these stochastic processes has received little attention. Here, we explore the combined effects of time delay and intrinsic noise on gene regulation. Beginning with a set of biochemical reactions, some of which are delayed, we deduce a truncated master equation for the reactive system and derive an analytical expression for the correlation function and power spectrum. We develop a generalized Gillespie algorithm that accounts for the non-Markovian properties of random biochemical events with delay and compare our analytical findings with simulations. We show how time delay in gene expression can cause a system to be oscillatory even when its deterministic counterpart exhibits no oscillations. We demonstrate how such delay-induced instabilities can compromise the ability of a negative feedback loop to reduce the deleterious effects of noise. Given the prevalence of negative feedback in gene regulation, our findings may lead to new insights related to expression variability at the whole-genome scale.master equation ͉ stochastic delay equations ͉ noise ͉ time delay ͉ systems biology T here is considerable experimental evidence that noise can play a major role in gene regulation (1-10). These fluctuations can arise from either intrinsic sources, which are related to the small numbers of reactant biomolecules, or extrinsic sources, which are attributable to a noisy cellular environment. Although the importance of fluctuations in gene regulation was stressed Ͼ30 years ago (11), recent experimental advances have renewed interest in the stochastic modeling of the biochemical reactions that underlie gene regulatory networks (12-16). The most typical approaches are the utilization of the Gillespie algorithms (17)(18)(19)(20), the direct analysis of the master equation, or the development of simplified descriptions based on the Fokker-Planck or Langevin equations (see ref. 21 for a review). A common thread in many of these approaches has been to consider intrinsic noise as the dominant source of variability in gene expression.One major difficulty often encountered in the analysis of gene regulatory networks is the vast separation of time scales between what are typically the fast reactions (dimerization, protein-DNA binding͞unbinding) and the slow reactions (transcription, translation, degradation). There have been many studies devoted to the development of reduced descriptions of these systems using the idea of quasiequilibrium for the fast processes compared with the slow dynamics (cf. ref. 22 and references therein). These approaches have thus far implicitly assumed that all...