Expression of virulence genes in Ralstonia solanacearum, a phytopathogenic bacterium, is controlled by a complex regulatory network that integrates multiple signal inputs. Production of several virulence determinants is co-ordinately reduced by inactivation of phcB, but is restored by growth in the presence of a volatile extracellular factor (VEF) produced by wild-type strains of R. solanacearum. The VEF was purified from spent culture broth by distillation, solvent extraction, and liquid chromatography. Gas chromatography and mass spectroscopy identified 3-hydroxypalmitic acid methyl ester (3-OH PAME) as the major component in the single peak of VEF activity. Authentic 3-OH PAME and the purified VEF were active at ≤1 nM, and had nearly equivalent specific activities for stimulating the expression of eps (the biosynthetic locus for extracellular polysaccharide) in a phcB mutant. Authentic 3-OH PAME also increased the production of three virulence factors by a phcB mutant over 20-fold to wild-type levels, restored normal cell density-associated expression of eps and increased expression of eps when delivered via the vapour phase. Reanalysis of the PhcB amino acid sequence suggested that it is a small-molecule S-adenosylmethionine-dependent methyltransferase, which might catalyse synthesis of 3-OH PAME from a naturally occurring fatty acid. Biologically active concentrations of extracellular 3-OH PAME were detected before the onset of eps expression, suggesting that it is an intercellular signal that autoregulates virulence gene expression in wild-type R. solanacearum. Other than acyl-homoserine lactones, 3-OH PAME is the only endogenous fatty acid derivative shown to be an autoregulator and may be the first example of a new family of compounds that can mediate long-distance intercellular communication.