Phage phi29 is a virulent phage of Bacillus subtilis with no known lysogenic cycle. Indeed, lysis occurs rapidly following infection of vegetative cells. Here, we show that phi29 possesses a powerful strategy that enables it to adapt its infection strategy to the physiological conditions of the infected host to optimize its survival and proliferation. Thus, the lytic cycle is suppressed when the infected cell has initiated the process of sporulation and the infecting phage genome is directed into the highly resistant spore to remain dormant until germination of the spore. We have also identified two host-encoded factors that are key players in this adaptive infection strategy. We present evidence that chromosome segregation protein Spo0J is involved in spore entrapment of the infected phi29 genome. In addition, we demonstrate that Spo0A, the master regulator for initiation of sporulation, suppresses phi29 development by repressing the main early phi29 promoters via different and novel mechanisms and also by preventing activation of the single late phi29 promoter.