An actinomycete strain No. B-52653 was found to produce an antibiotic selectively active against the in vitro antibiotic resistant mutant of Staphylococcus aureus. Based on taxonomic studies, the name Streptomyces albulus subsp. ochragerus subsp. nov. is proposed for the strain. The microorganism produced two kinds of antibiotics; one identical with gougerotin, the other an amphoteric water soluble dipeptide containing L-alanine. The latter has the molecular formula CQH15N3O8 and is named alahopcin. It has a broad antibacterial spectrum and a synergistic effect with some other antibiotics against some antibiotic resistant staphylococci. Alahopcin has a low toxicity and was effective against experimental infections in mice caused by Staphylococcus aureus.