In the course of a screening program, a novel quinolone antibiotic, YM-30059 (Fig. 1) was isolated from the culture broth of Arthrobacter sp. YL-02729S. YM-30059 exhibited relatively high antibacterial activities against Gram-positive bacteria including multiple-drug resistant Staphylococcus aureus and S. epidermidis. The present paper deals with the taxonomy of the producing organism, fermentation, isolation, structure elucidation and biological activity of the new antibiotic.