A strain of Streptomyces, designated as No. 2-89, newly isolated from a soil sample was very closely related in its cultural and morphological characteristics to variant strains of Streptomyces phaeoverticillatus which originally produced iyomycins. This strain was named as S. phaeoverticillatus var. takatsukiensis after the location, Takatsuki-shi, Osaka, Japan, where the soil sample yielding the strain No. 2-89 was collected. Whenthe strain of S. phaeoverticillatus var. takatsukiensis was fermented in the culture medium containing an anthraquinone sulfonate compound, a new antimicrobial and antitumor antibiotic named kidamycin, was produced. Kidamycin was obtained as orange red crystals, and differed from iyomycin B₁ by its toxicity, melting point, and infrared absorption spectrum. The taxonomy of the strains, fermentation, isolation, and physico-chemical and biological properties of kidamycin were investigated.