An endophytic streptomycete (NRRL 30566) is described and partially characterized from a fern-leaved grevillea (Grevillea pteridifolia) tree growing in the Northern Territory of Australia. This endophytic streptomycete produces, in culture, novel antibiotics - the kakadumycins. Methods are outlined for the production and chemical characterization of kakadumycin A and related compounds. This antibiotic is structurally related to a quinoxaline antibiotic, echinomycin. Each contains, by virtue of their amino acid compositions, alanine, serine and an unknown amino acid. Other biological, spectral and chromatographic differences between these two compounds occur and are given. Kakadumycin A has wide spectrum antibiotic activity, especially against Gram-positive bacteria, and it generally displays better bioactivity than echinomycin. For instance, against Bacillus anthracis strains, kakadumycin A has minimum inhibitory concentrations of 0.2-0.3 microg x ml(-1) in contrast to echinomycin at 1.0-1.2 microg x ml(-1). Both echinomycin and kakadumycin A have impressive activity against the malarial parasite Plasmodium falciparum with LD(50)s in the range of 7-10 ng x ml(-1). In macromolecular synthesis assays both kakadumycin A and echinomycin have similar effects on the inhibition of RNA synthesis. It appears that the endophytic Streptomyces sp. offer some promise for the discovery of novel antibiotics with pharmacological potential.