A new antibiotic, stubomycin, was isolated from the culture broth and mycelia of Streptomyces strain No. KG-2245. Stubomycin was prepared as colorless plates and has the empirical formula C29H35NO5. The antibiotic possesses growth inhibitory activity against Gram-positive bacteria and transplantable murine tumors, such as Ehrlich carcinoma, and leukemia P388. The antibiotic also shows direct cytotoxic activity against HeLa cells in vitro.