Bacteria of the genus Enterococcus are the main causes of highly antibiotic-resistant infections that are acquired in hospitals. Many clinical isolates of Enterococcus faecalis produce an exotoxin called cytolysin that contributes to bacterial virulence. In addition to its toxin activity, the cytolysin is bactericidal for nearly all Gram-positive organisms. An understanding of conditions that regulate cytolysin expression has advanced little since its initial description. Here we show that the products of two genes, cylR1 and cylR2, which lack homologues of known function, work together to repress transcription of cytolysin genes. Derepression occurs at a specific cell density when one of the cytolysin subunits reaches an extracellular threshold concentration. These observations form the basis of a model for the autoinduction of the cytolysin by a quorum-sensing mechanism involving a two-component regulatory system.