Anabaena sp. PCC 7120 was mutagenized by transposon Tn5-1087b, generating a mutant whose heterocysts lack the envelope polysaccharide layer. The transposon was located between nucleotides 342 and 343 of alr0117, a 918 bp gene encoding a histidine kinase for a two-component regulatory system. Complementation of the mutant with a DNA fragment containing alr0117 and targeted inactivation of the gene confirmed that alr0117 is involved in heterocyst development. RT-PCR showed that alr0117 was constitutively expressed in the presence or absence of a combined-nitrogen source. hepA and patB, the two genes turned on during wild-type heterocyst development, were no longer activated in an alr0117-null mutant. The two-component signal transduction system involving alr0117 may control the formation of the envelope polysaccharide layer and certain late events essential to the function of heterocysts.