Streptomyces chrysomallus and Streptomyces parvulus produce novel C-demethylactinomycins besides their normal actinomycins when fed with 3-hydroxyanthranilic acid (3-HA). The 3-HA is incorporated into pentapeptide lactone precursors in competition with the regular precursor 4-methyl-3-hydroxyanthranilic acid (4-MHA). The resultant 3-HA pentapeptide lactones can condense with each other, as well as with the continuously formed 4-MHA pentapeptide lactones giving C-demethylactinomycins lacking one or both methyl groups in their phenoxazinone chromophores. In case of C-demethylactinomyins lacking one methyl group, the condensation was shown to be regiospecific directing the 3-HA portion almost exclusively to the alpha-side of the phenoxazinone chromophore. As 3-HA is a weaker substrate for the 4-MHA-incorporating enzyme actinomycin synthetase I than 4-MHA, C-demethylactinomycins never exceeded 7-8% of total actinomycin formed. Surprisingly, C-demethylactinomycins (up to 0.8%) were also found in the actinomycin mixtures of unsupplemented streptomycete cultures after longer cultivation times, indicating the natural presence of 3-HA. Feeding with 3-hydroxykynurenine (3-HK) induced also formation of C-demethylactinomycins indicating that 3-HK is source of 3-HA. Analysis of tryptophan metabolites in the intracellular pools of the streptomycetes using 5-(3)H-tryptophan as radiotracer revealed formation of 4-MHA, but not of 3-HA. This indicates that intracellular 3-HK is almost exclusively converted to 3-hydroxy-4-methylkynurenine (4-MHK), which has been identified previously as direct precursor of 4-MHA. However, small amount of 3-HK leaking out from the 4-MHA pathway can be prematurely converted to 3-HA all along the cultivation of the streptomycetes resulting in the formation of natural C-demethylactinomycins.