Plants produce an immense number of natural products and undifferentiated cells from various plant tissues have long been considered an ideal source for their synthesis. However, undifferentiated plant cells often either lose their biosynthetic capacity over time or exhibit immediate repression of the required pathways once dedifferentiated. In this study, freshly prepared callus tissue was employed to further investigate the regulation of a natural product pathway in undifferentiated tobacco cells. Putrescine N-methyltransferase (PMT) is a pathway-specific enzyme required in nicotinic alkaloid production in Nicotiana species. Callus derived from transgenic Nicotiana tabacum plants harboring PMT promoter-GUS fusions were used to study factors that influence PMT expression. Under normal callus growth conditions in the presence of light and auxin, PMT promoter activity was strongly repressed. Conversely, dark conditions and the absence of auxin were found to upregulate PMT promoter activity, with light being dominant to the repressive effects of auxin. Since reactive oxygen species (ROS) are known by-products of photosynthesis and have been implicated in signaling, their involvement was investigated in transgenic callus by treatment with the ROS scavenger, dimethylthiourea, or catalase. Under highly repressive conditions for alkaloid synthesis, including normal culture conditions in the light, both ROS scavengers resulted in significant induction of PMT promoter activity. Moreover, treatment of callus with catalase resulted in the upregulation of PMT promoter activity and alkaloid accumulation in this tissue. These results suggest that ROS impact the regulation of the alkaloid pathway in undifferentiated cells and have implications for regulation of the pathway in other plant tissues.