The developmental bacterium Myxococcus xanthus utilizes gliding motility to aggregate during the formation of multicellular fruiting bodies. The social (S) component of M. xanthus gliding motility requires at least two extracellular surface structures, type IV pili (Tfp) and the fibril polysaccharide or exopolysaccharide (EPS). Retraction of Tfp is proposed to power S motility and EPS from neighbouring cells is suggested to provide an anchor and trigger for Tfp retraction. The production of EPS in M. xanthus is regulated in part by the Dif chemosensory pathway; however, the input signal for the Dif pathway in EPS regulation remains to be uncovered. Using a genetic approach combined with quantitative and qualitative analysis, we demonstrate here that Tfp function upstream of the Dif proteins in regulating EPS production. The requirement of Tfp for the production of EPS was verified using various classes of Tfp mutants. Construction and examination of double and triple mutants indicated that mutations in dif are epistatic to those in pil. Furthermore, extracellular complementation between various Tfp and dif mutants suggests that Tfp, instead of being signals, may constitute the sensor or part of the sensor responsible for mediating signal input into the Dif pathway. We propose that S motility involves a regulatory loop in which EPS triggers Tfp retraction and Tfp provide proximity signals to the Dif pathway to modulate EPS production.