Nerve growth factor (NGF)is a neurotrophic factor essential for survival and functioning of nerve cells1}. It has emerged as a potential thorough therapeutic for a variety of neurological diseases. However, since the NGFmolecule is too large in size to pass through the blood-brain barrier, NGF-like low molecular weight compounds are considered to be good candidates for treating patients with nerve diseases. During the course of our screening for microbial metabolites which induce neurite outgrowth of rat pheochromocytoma cell-line PC122), a novel active substance nerfilin I was isolated from the culture broth of Streptomyces halstedii 2723- SV2. This paper presents fermentation, purification, physico-chemical properties and structure elucidation of nerfilin I and its congener, nerfilin II.