A strain of Streptomyces was found to produce two new components of the 40-membered ring macrolides, malolactomycins C and D. They inhibited the growth of Botrytis cinerea in an agar. In the course of our screening program for new antifungal antibiotics, strain KP-3144, isolated from a soil sample and identified as Streptomyces was found to produce two new components of 40-membered ring macrolide antibiotics of the malolactomycin group, and named malolactomycins C (1) and D (2). In this paper we describe the taxonomy of producing strain, and the fermentation, isolation, characterization, structure elucidation and biological activity of 1 and 2.