Photorhabdus and Xenorhabdus species have mutualistic associations with nematodes and an entomopathogenic stage 1,2 in their life cycles. In both stages, numerous specialized metabolites are produced that have roles in symbiosis and virulence 3,4 . Although regulators have been implicated in the regulation of these specialized metabolites 3,4 , how small regulatory RNAs (sRNAs) are involved in this process is not clear. Here, we show that the Hfq-dependent sRNA, ArcZ, is required for specialized metabolite production in Photorhabdus and Xenorhabdus. We discovered that ArcZ directly base-pairs with the mRNA encoding HexA, which represses the expression of specialized metabolite gene clusters. In addition to specialized metabolite genes, we show that the ArcZ regulon affects approximately 15% of all transcripts in Photorhabdus and Xenorhabdus. Thus, the ArcZ sRNA is crucial for specialized metabolite production in Photorhabdus and Xenorhabdus species and could become a useful tool for metabolic engineering and identification of commercially relevant natural products.Regulation via trans-encoded small RNAs (sRNAs) typically occurs by imperfect base-pairing of sRNAs with their messenger-RNA targets and can be mediated by RNA chaperones such as Hfq and ProQ 5,6 . RNA duplexes are usually short (6-12 nucleotides) and can result in conformational changes in the RNA secondary structure with various regulatory outcomes 7 . The RNA chaperone Hfq is highly conserved throughout the bacterial kingdom 8 . Several complex phenotypes have been attributed to Hfq, which performs its regulatory roles by stabilizing sRNAs and/or mRNAs, mediating base-pairing of sRNAs and their targets, modulation of mRNA translation 8 as well as accelerating the degradation of sRNAs and their targets 5 . The expression of sRNAs is highly dynamic, with sRNA profiles in Salmonella shown to be strongly dependent on the bacterial growth phase 9 . ArcZ is one of the few Hfq-bound sRNAs whose expression remains relatively constant in Salmonella throughout the growth phases, constituting approximately 7-12% of all reads identified by Hfq co-immunoprecipitation experiments 9 . ArcZ is transcribed as a 129-nucleotide primary transcript (Fig. 1a) and processed into a stable short form (approximately 50 nucleotides) 9-11 . The processed short form of ArcZ activates rpoS translation directly and inhibits the expression of several other genes 11,12 . In Escherichia coli, the expression of arcZ is repressed by the ArcA-ArcB two-component system under anaerobic conditions. In a negative feedback loop, arcZ represses and is repressed by arcB transcription 11 . Although there is a wealth of research on ArcZ in E. coli and Salmonella 9-11 , its function in other bacteria remains unclear.Specialized metabolites (SMs) in bacteria are often responsible for ecologically important activities 13 . In the case of Xenorhabdus and Photorhabdus, SMs play an essential role in cross-kingdom interactions with nematodes, various insects as well as bacterial and fungal species comp...