Three biologically active compounds have been isolated from the fermentation products of a strain of Streptomyces griseus (SC 3875) originally obtained from a soil sample. One compound was the previously identified antidione, a second was the known antibiotic C-73 [3-(2-hydroxy-3,5-dimethylphenacyl)glutarimide], and the third, designated C-73X, was found to be closely related to C-73. Based on elemental analysis and ultraviolet, infrared, nmr, and mass spectral data, the structure of C-73X was assigned as 2-hydroxy-3-(2-hydroxy-3,5-dimethylphenacyl)glutarimide. Spectral comparisons (UV, IR, NMR, mass) of C-73, C-73X, and their acetates supported the structural assignment, including evidence for a hydroxyl group in C-73X. Biological activity tests showed C-73X inhibits the growth of Sarcoma 180 in Swiss albino mice but has a poor therapeutic index (200 mg/kg/day is toxic, doses <100 mg/kg/day are inactive). Its activity spectrum is similar to C-73: it does not inhibit gram-positive/negative bacteria, mycobacteria, Saccharomyces cerevisiae, or most Candida strains (one Candida strain is inhibited at 31 μg/ml). The isolation procedure for C-73X involved extraction (hexane, butanol), column chromatography (cellulose, alumina), and recrystallization. Characterization data (melting point, spectral bands, Rf value, elemental analysis) for C-73X and its diacetate are provided.