Beauveria sp. FO-6979, a soil isolate, was found to produce inhibitors of lipid droplet formation in mouse peritoneal macrophages. A new compound beauveriolide III was isolated along with a known compound beauveriolide I from the fermentation broth of the producing strain by solvent extraction, ODS column chromatography, silica gel column chromatography and preparative HPLC. Beauveriolides I and III caused a reduction in the number and size of cytosolic lipid droplets in macrophages at 10 microM without any cytotoxic effect on macrophages.