Marine-derived Streptomyces strain CNR-698, isolated from 1618-meter deep sediments in the Bahamas, was studied for bioactive natural products using the HCT-116 colon carcinoma cytotoxicity assay. Cytotoxicity-guided fractionation via C18 flash chromatography and RP-HPLC yielded two colored compounds, ammosamides A (1, blue solid) and B (2, red solid). Structural elucidation, challenging due to inherent insolubility (only soluble in DMSO) and poor NMR signals, integrated NMR spectral analysis, mass spectrometry, and single-crystal X-ray diffraction, revealing 1 as C₁₂H₁₀ClN₅OS (featuring a thio-γ-lactam, the first natural occurrence) and 2 as C₁₂H₁₀ClN₅O₂ (lactam). Chemical interconversion—Lawesson reagent converting lactam 2 to thiolactam 1, and hydrogen peroxide converting 1 back to 2—confirmed their relationship. Structural comparisons showed similarities to microbial product lymphostin and sponge-derived pyrroloiminoquinones (e.g., batzelline A), but with unique features: a quinoline tautomer due to a C-8 amino group, pyrrolidinone oxidation in 2, and the thio-γ-lactam in 1. Both compounds exhibited potent in vitro cytotoxicity against HCT-116 (IC₅₀ = 320 nM) and selectivity across diverse cancer cell lines (20 nM to 1 μM). Fluorescent conjugation identified their target as a myosin family member, a protein involved in cell cycle regulation, cytokinesis, and cell migration.