Streptomyces exfoliatus SMF13 produced leupeptin, chymotrypsin-like protease (CTP), metalloprotease, and trypsin-like protease (TLP) extracellularly. The activity of TLP was specifically inhibited by leupeptin. Production of leupeptin was closely associated with growth but leupeptin was inactivated by leupeptin-inactivating protein (LIP) when growth reached the stationary phase in submerged cultures, or when aerial mycelia started to form on surface cultures. Autolysis of mycelia after the stationary phase in submerged cultures was apparently retarded by the addition of leupeptin; on surface cultures, aerial mycelium formation was clearly retarded by the addition of leupeptin. We propose that CTP participates primarily in utilization of a proteinaceous nitrogen source, that TLP functions as an essential enzyme involved in the metabolism of mycelial protein, that leupeptin inhibits the activity of TLP and that LIP inactivates leupeptin. The cascade of regulatory actions of the compounds, which are produced sequentially during mycelium development, may provide selective advantages in adverse culture conditions.