Anabaena sp. strain PCC 7120 is a filamentous cyanobacterium that differentiates heterocysts in response to deprivation of combined nitrogen. A hetF deletion strain lacked heterocysts and had aberrant cell morphology. Site-directed mutagenesis of the predicted active-site histidine and cysteine residues of this putative caspase-hemoglobinase fold protease abolished HetF function, supporting the hypothesis that HetF is a protease. Deletion of patA, which is necessary for the formation of most intercalary heterocysts, or hetF resulted in an increase in HetR protein, and extra copies of hetF on a plasmid functionally bypassed the deletion of patA. A hetR-gfp translational fusion expressed from an inducible promoter demonstrated that hetF-dependent downregulation of HetR levels occurs rapidly in vegetative cells, as well as developing heterocysts. "Mosaic" filaments in which only one cell of a filament had a copy of hetR or hetF indicated that hetF is required for differentiation only in cells that will become heterocysts. hetF was required for transcription from a hetR-dependent transcription start point of the hetR promoter and induction of transcription from the patS promoter. The inverse correlation between the level of HetR protein and transcription from hetR-dependent promoters suggests that the transcriptional activity of HetR is regulated by HetF and PatA.