Competence for genetic transformation in Streptococcus pneumoniae has been known for three decades to arise in growing cultures at a critical cell density, in response to a secreted protease-sensitive signal. We show that strain CP1200 produces a 17-residue peptide that induces cells of the species to develop competence. The sequence of the peptide was found to be H-Glu-Met-Arg-Leu-Ser-Lys-Phe-Phe-Arg-Asp-Phe-Ile-Leu-Gln-Arg- Lys-Lys-OH. A synthetic peptide of the same sequence was shown to be biologically active in small quantities and to extend the range of conditions suitable for development of competence. Cognate codons in the pneumococcal chromosome indicate that the peptide is made ribosomally. As the gene encodes a prepeptide containing the Gly-Gly consensus processing site found in peptide bacteriocins, the peptide is likely to be exported by a specialized ATP-binding cassette transport protein as is characteristic of these bacteriocins. The hypothesis is presented that this transport protein is encoded by comA, previously shown to be required for elaboration of the pneumococcal competence activator.