CutRS was the first two-component system to be identified in Streptomyces species and is highly conserved in this genus. It was reported >25 years ago that deletion of cutRS increases the production of the antibiotic actinorhodin in Streptomyces coelicolor. However, despite this early work, the function of CutRS has remained enigmatic until now. Here we show that deletion of cutRS upregulates the production of the actinorhodin biosynthetic enzymes up to 300-fold, explaining the increase in actinorhodin production. However, while ChIP-seq identified 85 CutR binding sites in S. coelicolor none of these are in the actinorhodin biosynthetic gene cluster, meaning the effect is indirect. The directly regulated CutR targets identified in this study are implicated in extracellular protein folding, including two of the four highly conserved HtrA-family foldases: HtrA3 and HtrB, and a putative VKOR enzyme, which is predicted to recycle DsbA following its catalysis of disulphide bond formation in secreted proteins. Thus, we tentatively propose a role for CutRS in sensing and responding to protein misfolding outside the cell. Since actinorhodin can oxidise cysteine residues and induce disulphide bond formation in proteins, its over production in the ?cutRS mutant may be a response to protein misfolding on the extracellular face of the membrane.