A new cytotoxic and antifungal antibiotic, neihumicin, was isolated from the culture broth of a soil isolate identified as Micromonospora neihuensis Wu, sp. nov. Neihumicin shows in vitro cytotoxicity against KB tissue culture cells (ED50 0.94 micrograms/ml) as well as antifungal activity against Saccharomyces cerevisiae ATCC 9763.