During the course of our screening for microbial secondary metabolites possessing herbicidal activity, we isolated a new compound 5-hydroxy-9-methylstreptimidone (1), along with the known antibiotic 9-methylstreptimidone (2), from the culture filtrate of a fermented Streptomyces sp. Y-9065403. In this paper, we report their production, isolation, structure elucidation and biological properties.