The division of labour between reproductive queens and mostly sterile workers is among the defining characteristics of social insects. Queen-produced chemical signals advertising her presence and fertility status, i.e. queen pheromones, are normally used to assert the queen's reproductive dominance in the colony. Most queen pheromones identified to date are chemicals that stop the daughter workers from reproducing. Nevertheless, it has long been suggested that queen pheromones could also regulate reproduction in different ways. In some multiple-queen ants with obligately sterile workers, for example—such as fire ants and pharaoh ants—queen pheromones are thought to regulate reproduction by inhibiting the rearing of new sexuals. Here, we identify the first such queen pheromone in the pharaoh ant Monomorium pharaonis and demonstrate its mode of action via bioassays with the pure biosynthesized compound. In particular, we show that the monocyclic diterpene neocembrene, which in different Monomorium species is produced solely by fertile, egg-laying queens, strongly inhibits the rearing of new sexuals (queens and males) and also exerts a weakly attractive ‘queen retinue’ effect on the workers. This is the first time that a queen pheromone with such a dual function has been identified in a social insect species with obligately sterile workers.