In wild-type Streptomyces coelicolor MT1110 cultures, cyclic adenosine 3′,5′ monophosphate (cAMP) was synthesized throughout the developmental programme with peaks of accumulation both during germination and later when aerial mycelium and actinorhodin were being produced. Construction and characterization of an adenylate cyclase disruption mutant (BZ1) demonstrated that cAMP facilitated these developmental processes. Although pulse-labelling experiments showed that a similar germination process was initiated in BZ1 and MT1110, germ-tube emergence was severely delayed in BZ1 and never occurred in more than 85% of the spores. Studies of growth and development on solid glucose minimal medium (SMMS, buffered or unbuffered) showed that MT1110 and BZ1 produced acid during the first rapid growth phase, which generated substrate mycelium. Thereafter, on unbuffered SMMS, only MT1110 resumed growth and produced aerial mycelium by switching to an alternative metabolism that neutralized its medium, probably by reincorporating and metabolizing extracellular acids. BZ1 was not able to neutralize its medium or produce aerial mycelium on unbuffered SMMS; these defects were suppressed by high concentrations (>1 mM) of cAMP during early growth or on buffered medium. Other developmental mutants (bldA, bldB, bldC, bldD, bldG) also irreversibly acidified this medium. However, these bald mutants were not suppressed by exogenous cAMP or neutralizing buffer. BZ1 also differentiated when it was cultured in close proximity to MT1110, a property observed in cross-feeding experiments between bald mutants and commonly thought to reflect diffusion of a discrete positively acting signalling molecule. In this case, MT1110 generated a more neutral pH environment that allowed BZ1 to reinitiate growth and form aerial mycelium. The fact that actinorhodin synthesis could be induced by concentrations of cAMP (<20 μM) found in the medium of MT1110 cultures, suggested that it may serve as a diffusible signalling molecule to co-ordinate antibiotic biosynthesis.