Butyrolactone I [alpha-oxo-beta-(p-hydroxyphenyl)-gamma-(p-hydroxy-m-3, 3-dimethylallyl-benzyl)-gamma-methoxycarbonyl-gamma-butyrolactone] is produced as a secondary metabolite by Aspergillus terreus. Because small butyrolactone-containing molecules act as self-regulating factors in some bacteria, the effects of butyrolactone I on the producing organism were studied; specifically, changes in morphology, sporulation, and secondary metabolism were studied. Threefold or greater increases in hyphal branching (with concomitant decreases in the average hyphal growth unit), submerged sporulation, and secondary metabolism were observed when butyrolactone I was added to cultures of A. terreus. Among the secondary metabolites whose production was increased by this treatment was the therapeutically important compound lovastatin. These findings indicate that butyrolactone I induces morphological and sporulation changes in A. terreus and enhances secondary metabolite production in a manner similar to that previously reported for filamentous bacteria.