The anaerobic bacterium Clostridium perfringens mediates clostridial myonecrosis, or gas gangrene, by producing a number of extracellular toxins and enzymes. Transposon mutagenesis with Tn916 was used to isolate a pleiotropic mutant of C. perfringens that produced reduced levels of phospholipase C, protease and sialidase, and did not produce any detectable perfringolysin O activity. Southern hybridization revealed that a single copy of Tn916 had inserted into a 2.7 kb Hindlll fragment in the C. perfringens chromosome. A 4.3 kb Pstl fragment, which spanned the Tn916 insertion site, was cloned from the wild‐type strain. When subcloned into a shuttle vector and introduced into C. perfringens this fragment was able to complement the Tn916‐derived mutation. Transformation of the mutant with plasmids containing the 2.7 kb Hindlll fragment, or the 4.3 kb Pstl fragment resulted in toxin and enzyme levels greater than or equal to those of the wild‐type strain. The Pstl fragment was sequenced and found to potentially encode seven open reading frames, two of which appeared to be arranged in an operon and shared sequence similarity with members of two‐component signal transduction systems. The putative virR gene encoded a protein with a deduced molecular weight of 30140, and with sequence similarity to activators in the response regulator family of proteins. The next gene, virS, into which Tn916 had inserted, was predicted to encode a membrane‐spanning protein with a deduced molecular weight of 51 274. The putative VirS protein had sequence similarity to sensor proteins and also contained a histidine residue highly conserved in the histidine protein kinase family of sensor proteins. Virulence studies carried out using a mouse model implicated the virS gene in the pathogenesis of histotoxic C. perfringens infections. It was concluded that a two‐component sensor regulator system that activated the expression of a number of extracellular toxins and enzymes involved In virulence had been cloned and sequenced. A model that described the regulation of extracellular toxin production in C. perfringens was constructed.