A novel polycyclic xanthone, Sch 42137, related to the albofungin family of compounds was isolated from culture broth. Its structure was determined by detailed spectroscopic studies and comparison of circular dichroic studies to related compounds albofungin and simaomicin. Sch 42137 exhibited MIC values less than 0.125 micrograms/ml against yeasts and dermatophytes. Details are presented herein.