In our screening program for novel antifungal agents of microbial origin, an azoxy-containing antifungal named azoxybacilin was found in the culture broth of Bacillus cereus NR2991. Azoxybacilin shows potent in vitro antifungal activity in an amino acid free medium, especially against mycelial fungi such as Aspergillus fumigatus (IC80: 0.71–1.3 μg/ml) and Trichophyton mentagrophytes (IC80: 0.03–0.24 μg/ml), and moderate activity against yeast-type fungi including Candida albicans (IC80: 4.2–5.8 μg/ml). This report describes its fermentation, isolation, and structure elucidation. The producing organism was isolated from a soil sample in Odawara City, Kanagawa Prefecture, Japan, and identified as B. cereus. Structural elucidation using physicochemical properties (HRFAB-MS, NMR, IR, UV), hydrogenolysis, and chiral HPLC analysis revealed azoxybacilin to be (S)-2-amino-4-(Z-methyl-N,N,O-azoxy) butanoic acid. Azoxybacilin is the first azoxy-containing antifungal isolated from a bacterial source; previous azoxy-containing antibiotics and antifungals (e.g., elaiomycin, valanimycin, maniwamycins) were from Streptomyces and not amino acid derivatives.