The hyaluronic acid capsule of group A Streptococcus (GAS) is an important virulence factor, but little is known about mechanisms that regulate capsule expression. Transposon Tn916 mutagenesis of the poorly encapsulated M-type 3 GAS strain DLS003 produced a transconjugant that exhibited a mucoid colony morphology, reflecting increased hyaluronic acid capsule production. Analysis of chromosomal DNA sequence immediately downstream of the transposon insertion identified two open reading frames, designated csrR and csrS, which exhibited sequence similarity to bacterial two-component regulatory systems. We constructed an in-frame deletion mutation within csrR, which encodes the putative response component. Replacement of the native csrR gene in the DLS003 chromosome with the mutant allele resulted in a sixfold increase in capsule production and a corresponding increase in transcription of the has operon, which contains the essential genes for hyaluronic acid synthesis. Increased capsule production by the csrR mutant strain was associated with enhanced resistance to complement-mediated opsonophagocytic killing in vitro and with a 500-fold increase in virulence in mice. These results establish CsrR as a negative regulator of hyaluronic acid capsule synthesis and suggest that it is part of a two-component regulatory system that influences capsule expression and virulence.