The regulation of competence for genetic transformation in Streptococcus pneumoniae depends on a quorum-sensing system, but the only molecular elements of the system whose specific role have been identified are an extracellular peptide signal and an ABC-transporter required for its export. Here we show that transcription of comC, the gene encoding a predicted 41-residue precursor peptide that is thought to be processed and secreted as the 17-residue mature competence activator, increased approximately 40-fold above its basal level of expression in response to exogenous synthetic activator, consistent with earlier experiments indicating that the activator acts autocatalytically. We also describe two new genes, comD and comE, that encode members of histidine protein kinase and response-regulator families and are linked to comC. Disruption of comE abolished both response to synthetic activator peptide and endogenous competence induction.