Avermectins and Milbemycins (AM), 16-membered macrocyclic lactones with high insecticidal and antihelminthic activity, are widely used for broad-spectrum parasite control in agricultural, veterinary and medical fields. Previously, a genetically engineered strain Streptomyces bingchenggensis BCJ60, in which the milF gene encoding a C5-ketoreductase responsible for the ketonization of milbemycins was disrupted, was constructed with the production of 5-oxomilbemycins A3/A4 and the elimination of milbemycins A3, A4, B2 and B3. To further exploit the active constituents produced by this strain, detailed fractionation of the crude extract was conducted and two new milbemycin derivatives (1 and 2) were obtained. Their structures were elucidated using spectroscopic techniques including 1H-NMR, 13C-NMR, COSY, HMBC, NOESY, high resolution electrospray ionization mass spectroscopy, IR, UV and chemical methods (Modified Mosher's method), leading to the identification of 4-hydroxy-Δ2,3-milbemycin A4 (1) and 4-hydroxy-Δ2,3-milbemycin A3 (2). Acaricidal and nematocidal activity assays showed that compounds 1 and 2 possessed potent activities against Tetranychus cinnabarinus (LC50=0.129 and 0.111 mg l−1) and Bursaphelenchus xylophilus (LC50=5.145 and 5.288 mg l−1), which were comparable to those of commercial milbemycins A3/A4. In summary, these two new compounds from S. bingchenggensis BCJ60 not only have potential as biologically based pesticides but also provide new insight into the biosynthesis of milbemycins.