Myxococcus xanthus has a complex life cycle that includes fruiting body formation. One of the first stages in development has been called A-signalling. The asg (A-signalling) mutants have been proposed to be deficient in producing A-signal, resulting in development arresting at an early stage. In this paper, we report the identification of a new asg locus asgD. This locus appears to be involved in both environmental sensing and intercellular signalling. Expression of asgD was undetected during vegetative growth, but increased dramatically within 1 h of starvation. The AsgD protein is predicted to contain 773 amino acids and to be part of a two-component regulatory system because it has a receiver domain located at the N-terminus and a histidine protein kinase at the C-terminus. An asgD null mutant was defective in fruiting body formation and sporulation on CF medium. However, the defects of the mutant were complemented extracellularly when cells were mixed with wild-type strains or with bsgA, csgA, dsgA or esgA mutants, but were not complemented extracellularly by asgA, asgB or asgC mutants. In addition, the mutant was rescued by a subset of A-factor amino acids. Surprisingly, when the mutant was plated on stringent starvation medium rather than CF, cells were able to form fruiting bodies. Thus, it appears that AsgD is directly or indirectly involved in sensing nutritionally limiting conditions. The discovery of the asgD locus provides an important sensory transduction component of early development in M. xanthus.