Transforming growth factor-β (TGF-β) was first discovered as a trophic factor to several kinds of cells and is now well known to act as a growth inhibitor to various kinds of animal cells. In addition, TGF-β protects neuronal cells from damages caused by stress such as L-glutamate toxicity and β-amyloid toxicity, which are considered to be associated with brain ischemia injury and Alzheimer's disease, respectively, so substances which mimic TGF-β action are expected to be useful for treatment of diseases such as ischemia injury. For detecting TGF-β like activities, we constructed a screening system utilizing reporter gene expression with Mink lung epithelial (Mv1Lu) cells transfected with the firefly luciferase reporter gene at the downstream of the plasminogen activator inhibitor-1 (PAI-1) promoter gene. During the course of our screening using this system, we isolated histone deacetylase inhibitors such as trichostatin A, and further investigation has resulted in the isolation of a novel metabolite with TGF-β like activity, diheteropeptin. We report herein the fermentation, isolation, structure determination, and biological activities of diheteropeptin. The diheteropeptin producing organism was identified as Diheterospora sp. Diheteropeptin is a cyclic peptide structurally very similar to chlamydocin that has the same tetrapeptidyl ring system with an epoxy ketone group instead of the 3-methyl-1,2-glycol function in diheteropeptin. In the evaluation system we employed, the addition of TGF-β at the concentration of 40 ng/ml to Mv1Lu cells increased the expression of luciferase three times. Diheteropeptin induced the PAI-1 promoter gene expression more than three times at the concentrations from 0.98 μM to 1.0 mM. In order to compare the biological activities of diheteropeptin and chlamydocin that showed cytostatic activities, we evaluated the effect of diheteropeptin on the cell growth by measuring MTT reduction and LDH release. Diheteropeptin exhibited the cytostatic effect to Mv1Lu cells with IC50 value of 20.3 μM as determined by the MTT assay. No LDH release, however, suggested that diheteropeptin showed only the cytostatic activity to Mv1Lu cells, and this biological activity pattern was similar to that of TGF-β.