Starvation-induced development of Myxococcus xanthus is an excellent model for biofilm formation because it involves cell-cell signaling to coordinate formation of multicellular mounds, gene expression, and cellular differentiation into spores. The role of σD, an alternative σ factor important for viability in stationary phase and for stress responses, was investigated during development by measuring signal production, gene expression, and sporulation of a sigD null mutant alone and upon codevelopment with wild-type cells or signaling mutants. The sigD mutant responded to starvation by inducing (p)ppGpp synthesis normally but was impaired for production of A-signal, an early cell density signal, and for production of the morphogenetic C-signal. Induction of early developmental genes was greatly reduced, and expression of those that depend on A-signal was not restored by codevelopment with wild-type cells, indicating that σD is needed for cellular responses to A-signal. Despite these early developmental defects, the sigD mutant responded to C-signal supplied by codeveloping wild-type cells by inducing a subset of late developmental genes. σD RNA polymerase is dispensable for transcription of this subset, but a distinct regulatory class, which includes genes essential for sporulation, requires σD RNA polymerase or a gene under its control, cell autonomously. The level of sigD transcript in a relA mutant during growth is much lower than in wild-type cells, suggesting that (p)ppGpp positively regulates sigD transcription in growing cells. The sigD transcript level drops in wild-type cells after 20 min of starvation and remains low after 40 min but rises in a relA mutant after 40 min, suggesting that (p)ppGpp negatively regulates sigD transcription early in development. We conclude that σD synthesized during growth occupies a position near the top of a regulatory hierarchy governing M. xanthus development, analogous to σ factors that control biofilm formation of other bacteria.