Strain GS101 of Erwinia carotovora makes the carbapenem antibiotic, 1-carbapen-2-em-3-carboxylic acid. Mutants defective in antibiotic production can be assigned to two groups, group 1 and group 2. Group 2 mutants are defective in the carl gene encoding a protein responsible for synthesis of the Lux autoinducer N-(3-oxohexanoyl)-L-homoserine lactone (OHHL), which is required to induce carbapenem synthesis in strain GS101. In this paper we describe the molecular genetic analysis of the group 1 mutants which we presumed were defective in the carbapenem biosynthesis (car) genes. We isolated a cosmid (cWU142) that complemented the group 1 mutants of strain GS101. A small (1.03 kb) subclone of cWU142 complemented most of the group 1 mutants, and the sequence revealed that the relevant gene (carR) encodes a homologue of the Vibrio fischeri LuxR protein. A disproportionately high frequency of carR mutants arose in strain GS101 and this was due to carR acting as a 'hot spot' target for secondary transposition of a Tn5 element in this strain. The CarR protein joins a rapidly growing list of homologues, found in taxonomically unrelated bacteria, which act as positive transcriptional activators of genes encoding diverse metabolic functions, including bioluminescence, exoenzyme virulence factor synthesis, cell division, plasmid conjugation, rhizosphere-specific gene induction, surfactant synthesis and antibiotic production. Most of these LuxR-type regulators have been shown to depend, for their function, on N-acyl homoserine lactones, which act as chemical signals enabling co-ordination of gene expression with cell density.