An antibiotic, identical with or closely related to xanthomycin A, was isolated from a soil Streptomyces. The antibiotic displayed significant therapeutic activity by i.p. administration against i.p.-implanted mouse tumors: Ehrlich carcinoma, sarcoma 180 and P388 leukemia. Less therapeutic activity was observed by i.p. injection in mice bearing s.c. solid tumors of Ehrlich carcinoma and sarcoma 180. No significant activity was found against L1210 leukemia, B16 melanoma and Lewis lung carcinoma. In vitro the antibiotic exhibited a potent cytotoxicity to human leukemia K562 and mouse lymphoblastoma L5178Y cells. DNA strand scission of PM2 phage was caused by the antibiotic in the presence of dithiothreitol.