Nagstatin, a new inhibitor of N-acetyl-beta-D-glucosaminidase (NAG-ase) was discovered in the fermentation broth of Streptomyces amakusaensis MG846-fF3. It was purified by chromatography on Dowex 50W, Avicel and Sephadex LH-20 followed by the treatment of active carbon and then isolated as colorless powder. Nagstatin has the molecular formula of C12H17N3O6. It is competitive with the substrate, and the inhibition constant (Ki) was 1.7 x 10(-8) M.