In the course of screening for substances that modulate immune responses in conjunction with T cell functions, we found conagenin, a novel, low MW immunomodulator, in fermentation broths of Streptomyces roseosporus MI696-AF3. The structure of conagenin was determined to be (2S)-N-[(2R,3S,4R)-2,4-dihydroxy-3-methylpentanoyl]-2-methylserine on the basis of spectroscopic evidence (Fig. 1). In this paper, we report production and purification of conagenin, and its effect on T lymphocytes.