The Streptomyces coelicolor obg gene, which encodes a putative GTP-binding protein of the Obg/Gtp1 family, was characterized. The obg gene was essential for viability. Introduction of multiple copies of obg into wild-type S. coelicolor suppressed aerial mycelium formation. A single amino acid substitution at any of six positions was introduced into the GTP binding site of Obg, and the mutated proteins were expressed in wild-type cells. ObgP168 → V exerted a more accentuated suppressive effect on aerial mycelium formation than did the wild-type Obg protein. In contrast, ObgG171 → A accelerated the development of aerial mycelium. These results show that Obg protein functions as a pivotal regulator for the onset of cell differentiation through its ability to bind GTP. Western analysis revealed that expression of obg is regulated in a growth phase-dependent manner, indicating a sharp decrease just after onset of aerial mycelium development or at the end of vegetative growth. Obg was a membrane-bound protein as determined by immunoelectron microscopy.