The atypical two-component system (TCS) AbrC1/C2/C3 (encoded by SCO4598, SCO4597, and SCO4596), comprising two histidine kinases (HKs) and a response regulator (RR), is crucial for antibiotic production in Streptomyces coelicolor and for mor- phological differentiation under certain nutritional conditions. In this study, we demonstrate that deletion of the RR-encoding gene, abrC3 (SCO4596), results in a dramatic decrease in actinorhodin (ACT) and undecylprodiginine (RED) production and delays morphological development. In contrast, the overexpression of abrC3 in the parent strain leads to a 33% increase in ACT production in liquid medium. Transcriptomic analysis and chromatin immunoprecipitation with microarray technology (ChIP- chip) analysis of the ΔabrC3 mutant and the parent strain revealed that AbrC3 directly controls ACT production by binding to the actII-ORF4 promoter region; this was independently verified by in vitro DNA-binding assays. This binding is dependenton the sequence 5'-GAASGSGRMS-3'. In contrast, the regulation of RED production is not due to direct binding of AbrC3 to either the redZ or redD promoter region. This study also revealed other members of the AbrC3 regulon: AbrC3 is a positive auto- regulator which also binds to the promoter regions of SCO0736, bdtA (SCO3328), absR1 (SCO6992), and SCO6809. The direct targets share the 10-base consensus binding sequence and may be responsible for some of the phenotypes of the ΔabrC3 mutant. The identification of the AbrC3 regulon as part of the complex regulatory network governing antibiotic production widens our knowledge regarding TCS involvement in control of antibiotic synthesis and may contribute to the rational design of new hyper-producer host strains through genetic manipulation of such systems.