Calpain is a cytosolic cysteine protease regulated by Ca2+ widely distributed in mammalian and avian cells. Its function is to catalyze proteolysis of target proteins in cells, causing significant changes in metabolic processes such as activation of protein kinase C, neuropeptide metabolism and activation of platelets. Calpain inhibitors have been isolated from the tissues of a variety of animals, plants and culture fluids of microbes, and their biological significance has been investigated because of their therapeutic effects, as they can be used for the treatment of neurodegenerative diseases by preventing neuronal cell loss. In our natural products program screening for calpain inhibitors from microbial sources, an actinomycete strain Streptomyces griseus (SC488) exhibited activity in the calpain assay. Two new peptides, a diketopiperazine of N-methyltyrosine (1) and a tetrapeptide containing N-methyltyrosine (2), were isolated from this strain. These compounds inhibit the enzyme calpain in the micromolar range and were characterized on the basis of spectroscopic analysis, amino acid analysis and sequencing. The structure of the tetrapeptide N-methyltyrosyl-N-methyltyrosyl-leucyl-alanine (2) was also confirmed by total synthesis. In this paper, the isolation, structure elucidation and activity of these two novel calpain inhibitors are described.