In the course of a screening program for new antibiotics from microorganisms, a novel polyether antibiotic AC7230 has been isolated from a culture broth. The producing organism was obtained from a soil sample collected at Nagano Prefecture, Japan and identified as Dactylosporangium sp. AC7230 (FERM P-8502). Fermentation was carried out on a rotary shaker (250rpm, 5cm-gyration) at 28°C for 3 days using a medium consisting of sucrose 2.0%, soybean flour 1.0%, cotton seed flour 0.5%, dry yeast 0.25%, NaBr 0.1% and CaCO3 0.1% (pH 6.5). The fermented broth (10 liters) was centrifuged, and the antibiotic was extracted from the mycelial cake with acetone, concentrated, then extracted with ethyl acetate. The ethyl acetate extract was concentrated to an oil, dissolved in chloroform, washed with 0.5 N HCl, saturated sodium carbonate and water, dried over sodium sulfate, filtered, concentrated, and applied to a Sephadex LH-20 column (420 ml) with chloroform-methanol (1:1) as eluent. Bioactive fractions against Bacillus subtilis ATCC6633 with a single spot on TLC were concentrated to yield the crystalline sodium salt of AC7230 (210 mg). The free acid was obtained by extracting the sodium salt solution with chloroform at pH 1. The antibiotic is an acidic substance, stable at acidic or alkaline pH, soluble in chloroform and dimethyl sulfoxide, insoluble in water and hexane. It was positive for FeCl3 reaction but negative for Molisch and ninhydrin reactions. The 1H NMR spectrum (100MHz, in CDCl3) of the free acid showed five aromatic protons (two as an isolated AB spectrum (δA 7.57, δB 7.07, JAB=9.0 Hz) characteristic of a 1,2,3,4-tetrasubstituted benzene derivative, three as multiplets suggesting five-membered hetero-aromatics), four secondary methyl groups (δ 0.99, 0.85, 0.80, 0.74), a phenolic hydroxyl group (δ 12.9) and a carboxylic acid group (δ 14.0). Its physico-chemical properties (e.g., UV, IR, 1H NMR spectra) are summarized in Table 1.