Three open reading frames denoted as orf21, orf22, and orf23 were identified from downstream of the currently recognized gene cluster for clavulanic acid biosynthesis in Streptomyces clavuligerus ATCC 27064. The new orfs were annotated after in silico analysis as genes encoding a putative sigma factor, a sensor kinase, and a response regulator. The roles of the individual genes were explored by disruption of the corresponding orfs, and the morphological and antibiotic production phenotypes of the resulting mutants were compared. In orf21 and orf22 mutants, no growth or morphological differences were noted, but modest reduction of cephamycin C (orf21), or both cephamycin C and clavulanic acid production (orf22) compared with wild-type, were observed. In orf23 mutant, cell growth and sporulation was retarded, and clavulanic acid and cephamycin C production were reduced to 40 and 47% of wild-type levels, respectively. Conversely, overexpression of orf23 caused precocious hyperproduction of spores on solid medium, and antibiotic production was increased above the levels seen in plasmid control cultures. Transcriptional analyses were also carried out on orf23 and showed that mutation had little effect on transcription of genes associated with the early stages of cephamycin C or clavulanic acid production but transcription of claR, which regulates the late stages of clavulanic acid production, was reduced in orf23 mutants. These observations suggest that the orf23 product may enable S. clavuligerus to respond to environmental changes by altering cell growth and differentiation. In addition, the effects of ORF23 on growth might indirectly regulate the biosynthesis of secondary metabolites such as clavulanic acid and cephamycin C.