A new peptide antibiotic named takaokamycin was isolated from a fermentation broth of Streptomyces sp. AC-1978, a soil isolate. It exhibits antibacterial activity against some Gram-positive bacteria. The molecular weight was found to be 1,130 on the basis of elemental analysis, FD-mass spectrum and 1H and 13C NMR. Acid hydrolysate of takaokamycin contains isoleucine, threonine and unidentified amino acids.