The soil bacterium Streptomyces cacaoi produces an extracellular beta-lactamase. The beta-lactamase expression could be induced by the beta-lactam compound 6-amino penicillinoic acid (6-APA). In liquid cultures, a 50-fold increase in beta-lactamase expression was observed within the first three hours after addition of 6-APA. Using the cloned beta-lactamase gene as a probe, it was shown that this increase was mediated at the level of transcriptional initiation. The start point of the induced beta-lactamase transcript was determined, and the nucleotide sequence of the promoter region was analysed. No noticeable homology was found to control regions of inducible beta-lactamase genes of other bacteria. A striking feature was the presence of six direct repeats (ten base pairs each) upstream of the promoter region. Thus, an example of an inducible regulatory gene system in this Gram-positive microorganism is presented. Also, the primary structure of the beta-lactamase was deduced, showing a high degree of homology with class A beta-lactamases.