In the course of our search for new indophenol-reducing substances, a strain of Streptomyces was found to produce USF-142A, a novel 1,3-dicarbonyl compound which reduces 2,6-dichlorophenol indophenol and exists in keto-enol tautomers in solution. This compound showed antioxidative activity by the Rhodan iron method. 2,6-Dichlorophenol indophenol is used as a reagent for evaluating ascorbic acid, and is easily reduced to leuco indophenol by ascorbic acid. We have used this indophenol to find natural antioxidants of microbial origin. We isolated a compound, tentatively named USF-142A (I), from the culture filtrate of Streptomyces USF-142 which had been isolated from soil collected in Kanaya-cho, Shizuoka prefecture. In this report, we describe the isolation, physico-chemical properties, elucidation of the chemical structure and antioxidative activity of this compound.