The filamentous bacterium, Streptomyces coelicolor, undergoes a complex cycle of growth and development in which morphological differentiation coincides with the activation of the orphan response regulator RamR and the biosynthesis of a morphogenic peptide called SapB. SapB is a lantibiotic-like molecule derived from the product of the ramS gene that promotes formation of aerial hyphae by breaking the aqueous tension on the surface of the substrate mycelium. A ramR-disrupted mutant is delayed in aerial hyphae formation while constitutive overexpression of ramR accelerates aerial hyphae formation in the wild-type strain and restores SapB biosynthesis and aerial hyphae formation in all developmental mutants (bld) tested. Using DNA microarrays to globally identify S. coelicolor genes whose transcription was affected by ramR mutation or overexpression, we discovered a ramR-activated locus of contiguous cotranscribed developmental genes that modulate both aerial hyphae formation and sporulation. The genes of this cluster of ramR-activated genes (rag), which are chromosomally distant from previously known RamR-regulated genes, include: ragA (sco4075) and ragB (sco4074), which encode two subunits of an ABC transporter, ragK (sco4073), a putative histidine kinase, and ragR (sco4072), a ramR paralogue. Promoter mapping and protein–DNA binding experiments indicate that RamR activates ragABKR transcription directly, by binding to three sequence motifs in the ragABKR promoter region. A constructed ragABKR null mutant was able to synthesize SapB and erect aerial hyphae; however, these hyphae were unusually branched, reminiscent of substrate hyphae. Subsequent stages of differentiation, septation and sporogenesis were delayed. The role of ragABKR in aerial hyphae formation was shown both by epistasis (ragR-activated aerial hyphae formation in bld mutants) and extracellular complementation (ragR-induced synthesis of an activity allowing aerial hyphae formation in bld mutants) experiments. In conclusion, the ragABKR locus activates a SapB-independent developmental pathway that is involved in both aerial hyphae formation and sporulation, serving to integrate sequential morphogenic changes.