Mycothiol (MSH) is a small thiol molecule with a cysteine-ligated disaccharide structure found in actinomycetes that include streptomycetes and mycobacteria. In Streptomyces coelicolor, a model organism for antibiotic production and differentiation, the amount of MSH is under the control of a sigma factor sigma(R), which is regulated by an antisigma factor RsrA with a thiol-disulphide redox switch. We found that the first gene (mshA) in the biosynthetic pathway for MSH and the gene for amidase (mca) that participates in detoxifying mycothiol-reactive drugs are under direct control of sigma(R). The sigma(R) target genes are induced not only by a thiol oxidant diamide, but also by alkylating agents that cause a rapid decrease in MSH. Expression of the sigma(R) regulon was also elevated in MSH-deficient mutants, suggesting that a decrease in the level of MSH is a natural intracellular trigger for sigma(R) activation. We found that MSH was capable of reducing RsrA to bind sigma(R), whereas glutathione was not. These results support a proposal that the RsrA-sigma(R) system senses the intracellular level of reduced MSH, and that MSH serves as a natural modulator of the transcription system for its own replenishment in addition to being a redox buffer and drug detoxifier.