Nigrospora oryzae was isolated from dallisgrass (Paspalum dilatatum Poir.) collected in Auburn and from hay shipped under refrigeration to Florida. Some of these samples were eaten by cattle and horses that subsequently developed lameness. Metabolites of N. oryzae were separated by thin layer chromatography and tested for toxicity. Only one metabolite was toxic. Metabolite A showed toxicity to brine shrimp with an LD50 = 500 micrograms/ml in 8 h. It also had an antibiotic effect on Bacillus megaterium ATCC 14581 with a minimum inhibitory level of 10.1 micrograms/disc. As little as 435 micrograms of a crude methanolic extract of N. oryzae showed mild toxicity to chick embryos. The metabolite was not toxic to mice nor rats at the levels tested. Quantitative procedures developed for the determination of metabolite A showed that the maximum production occurred in yeast extract-sucrose liquid medium with an initial pH of 5-6, when incubated as a stationary culture for 28 days at 25 degrees C. It was concluded that metabolite A is a weak antibiotic rather than a mycotoxin, and was probably not associated with the symptoms of lameness observed in cattle and horses. The antibiotic is not one previously reported for N. oryzae.