In the course of screening for new antibiotics, we have isolated dioxapyrrolomycin (1), which inhibits the growth of Gram-positive bacteria, some Gram-negative bacteria and some fungi, from cultured broth of Streptomyces sp. MG796- AF7. The structure of the N-methyl derivative (2) was determined by X-ray crystallographic analysis to be (4S)-6,8-dichloro-4-(4,5-dichloro-1-methyl-3-nitro-2-pyrrolyl)-1,3-benzodioxane (Fig. 1). In this report, the production, isolation, physico-chemical properties, structure and biological properties of 1 are reported.