A novel two-component system (TCS) designated as DraR-K (sco3063/sco3062) was identified to be involved in differential regulation of antibiotic biosynthesis in Streptomyces coelicolor. The S. coelicolor mutants with deletion of either or both of draR and draK exhibited significantly reduced actinorhodin (ACT) but increased undecylprodigiosin (RED) production on minimal medium (MM) supplemented separately with high concentration of different nitrogen sources. These mutants also overproduced a yellow-pigmented type I polyketide (yCPK) on MM with glutamate (Glu). It was confirmed that DraR-K activates ACT but represses yCPK production directly through the pathway-specific activator genes actII-ORF4 and kasO, respectively, while its role on RED biosynthesis was independent of pathway-specific activator genes redD/redZ. DNase I footprinting assays revealed that the DNA binding sites for DraR were at −124 to −98 nt and −24 to −1 nt relative to the respective transcription start point of actII-ORF4 and kasO. Comparison of the binding sites allowed the identification of a consensus DraR-binding sequence, 5′-AMAAWYMAKCA-3′ (M: A or C; W: A or T; Y: C or T; K: G or T). By genome screening and gel-retardation assay, 11 new targets of DraR were further identified in the genome of S. coelicolor. Functional analysis of these tentative targets revealed the involvement of DraR-K in primary metabolism. DraR-K homologues are widely spread in different streptomycetes. Interestingly, deletion of draR-Ksav (sav_3481/sav_3480, homologue of draR-K) in the industrial model strain S. avermitilis NRRL-8165 led to similar abnormal antibiotic biosynthesis, showing higher avermectin while slightly decreased oligomycin A production, suggesting that DraR-K-mediated regulation system might be conserved in streptomycetes. This study further reveals the complexity of TCS in regulation of antibiotic biosynthesis in Streptomyces.