The hallmark of social insects is their caste system: reproduction is primarily monopolized by queens, whereas workers specialize in the other tasks required for colony growth and survival. Pheromones produced by reining queens have long been believed to be the prime factor inhibiting the differentiation of new reproductive individuals. However, there has been very little progress in the chemical identification of such inhibitory pheromones. Here we report the identification of a volatile inhibitory pheromone produced by female neotenics (secondary queens) that acts directly on target individuals to suppress the differentiation of new female neotenics and identify n-butyl-n-butyrate and 2-methyl-1-butanol as the active components of the inhibitory pheromone. An artificial pheromone blend consisting of these two compounds had a strong inhibitory effect similar to live neotenics. Surprisingly, the same two volatiles are also emitted by eggs, playing a role both as an attractant to workers and an inhibitor of reproductive differentiation. This dual production of an inhibitory pheromone by female reproductives and eggs probably reflects the recruitment of an attractant pheromone as an inhibitory pheromone and may provide a mechanism ensuring honest signaling of reproductive status with a tight coupling between fertility and inhibitory power. Identification of a volatile pheromone regulating caste differentiation in a termite provides insights into the functioning of social insect colonies and opens important avenues for elucidating the developmental pathways leading to reproductive and nonreproductive castes.