A novel class of lipopeptides was isolated from Bacillus thuringiensis kurstaki HD-1. Four compounds (1-4) were separated by high-performance liquid chromatography and their primary structures determined using a combination of chemical reactions and mass spectrometry. The four lipopeptides were found to have the same amino acid sequence, Thr-Gly-Ala-Ser-His-Gln-Gln, but different fatty acids. The fatty acyl chain is linked to the N-terminal amino acid residue via an amide bond. Each lipopeptide has a lactone linkage between the carboxyl terminal amino acid and the hydroxyl group in the side chain of the serine residue. Antifungal activity was demonstrated against Stachybotrys charatum.