Neurotrophic factors are known to be essential for the normal development and functional maintenance of nerve cells. A decrease in availability of neurotrophic factors is considered to cause dysfunction of the nervous system, resulting in various nerve diseases such as Alzheimer's and Parkinson's diseases and neuronal death induced by brain ischemia. Contrary to this, up-regulation of neurotrophic factors is observed in patients with intractable temporal lobe epilepsy and after excitotoxicity in a rat model of Huntington's disease. Therefore, both modulators, inducer and inhibitor, for neurite outgrowth can be useful to treat patients with nerve diseases. Although several modulators, including KS-505a, K252a, staurosporine, lactacystin, epolactaene, PD 098059, and AG879, have been discovered so far, there are delays in the practical application as therapeutic drugs. Under these circumstances, we started screening for natural substances that regulate differentiation of rat pheochromocytoma PC12 cells. During the course of the screening, an extremely potent inhibitor of NGF-induced neurite outgrowth from PC12 cells, indocarbazostatin, was isolated from a culture broth of a Streptomyces sp. The compound inhibited NGF-induced neurite outgrowth from PC12 cells at 6 nM, which is approximately 33 times higher than that of K252a in our assay system. In this communication we describe the screening, isolation, structure and biological properties of indocarbazostatin.