Oxytetracycline (OTC) is a broad-spectrum antibiotic commercially produced by Streptomyces rimosus. Despite its importance, little is known about the regulation of OTC biosynthesis, which hampered any effort to improve OTC production via engineering regulatory genes. A gene encoding a Streptomyces antibiotic regulatory protein (SARP) was discovered immediately adjacent to the otrB gene of oxy cluster in S. rimosus and designated otcR. Deletion and complementation of otcR abolished or restored OTC production, respectively, indicating that otcR encodes an essential activator of OTC biosynthesis. Then, the predicted consensus SARP-binding sequences were extracted from the promoter regions of oxy cluster. Transcriptional analysis in a heterologous GFP reporter system demonstrated that OtcR directly activated the transcription of five oxy promoters in E. coli, further mutational analysis of a SARP-binding sequence of oxyI promoter proved that OtcR directly interacted with the consensus repeats. Therefore, otcR was chosen as an engineering target, OTC production was significantly increased by overexpression of otcR as tandem copies each under the control of strong SF14 promoter. A SARP activator, OtcR, was identified in oxy cluster of S. rimosus; it was shown to directly activate five promoters from oxy cluster. Overexpression of otcR at an appropriate level dramatically increased OTC production by 6.49 times compared to the parental strain, thus demonstrating the great potential of manipulating OtcR to improve the yield of OTC production.