Capsimycin is a new antifungal antibiotic produced by a strain of Streptomyces sp. C 49--87. The active substance in the fermented broth was isolated by solvent extraction followed by silica gel column chromatography. The antibiotic melts at 186 degrees C (decomp.) and has a molecular formula C30H40N2O6. It exhibits marked inhibitory activity against Phytophthora capsici (Leaf blight disease of cucumber) and Pythium debaryanum (Damping-off disease of cucumber).