Determination of the mechanism of action of FK506 and cyclosporin A has yielded new molecular targets involved in signal transduction during T cell activation. A common target of FK506 and cyclosporin A is inhibition of activation of the NFAT transcription factor, for which a specific binding region is present in the promoter of the IL-2 gene. A reporter gene assay has been used to screen for agents that interfere with this early step in T cell activation. Simple aromatic compounds that block NFAT-dependent transcription and show in vitro immunosuppressive activity were isolated from the broth and mycelia of two Streptomyces sp. fermentations. The compounds were active at concentrations that were not directly cytotoxic.