A new inhibitor of acyl-CoA:cholesterol acyltransferase (ACAT), designated lateritin, was isolated from the mycelial cake of Gibberella lateritium IFO 7188 by successive purification procedure of solvent extraction, silica gel column chromatography and reverse phase HPLC. Spectroscopic analyses of the compound yielded 4-methyl-6-(1-methylethyl)-3-phenylmethyl-1,4-perhydrooxazine-2,5- dione as the proposed structure. Lateritin inhibited rat liver ACAT activity by 50% at a concentration of 5.7 microM. This inhibition was time-dependent and irreversible.