A resting cell system was used to study the sites of inhibition by NH₄⁺ of protylonolide biosynthesis by a blocked mutant, strain 261, of Streptomyces fradiae. With ¹⁴C-labeled succinate or valine as an exogenous substrate, labeled protylonolide formation by high-NH₄⁺ grown mycelia of strain 261 was lower than by low-NH₄⁺ grown mycelia. When ¹⁴C-labeled palmitate or acetate + labeled propionate + butyrate were used as the substrates, protylonolide production by mycelia grown under the two NH₄⁺ conditions was nearly at the same rates. It is suggested that the metabolism of succinate and valine to lower fatty acid precursors is subject to NH₄⁺ regulation, whereas condensation of acid precursors and related steps leading to protylonolide are insensitive to NH₄⁺ concentration.