A novel actinomycete was isolated from compost soil and was studied taxonomically and phylogenetically. Cells of this organism were gram positive, not acid fast, nonmotile, nonsporulating, irregular coccoid to short rod shaped, and microaerophilic. The cell wall peptidoglycan contained lysine and was cross-linked via an L-Lys<--L-Ser<--D-Asp interpeptide bridge. The major menaquinone was MK-8(H4). The polar lipids were phosphatidylinositol, phosphatidylglycerol, diphosphatidylglycerol, phosphatidylethanolamine, and two unknown phospholipids. Mycolic acids were absent. The cellular fatty acid profile was complex, with large amounts of saturated and monounsaturated straight-chain acids and smaller amounts of iso and anteiso branched-chain acids. The G+C content of the DNA was 66 mol%. Comparative 16S ribosomal DNA studies revealed that strain HKI 0089T represents a novel lineage within Actinobacteria (32) distinct from all previously described genera and most closely related to members of the genera Kytococcus, Dermacoccus, and Dermatophilus of the family Dermatophilaceae. On the basis of our results, we suggest that strain HKI 0089 should be classified in a new genus and species, for which we propose the name Demetria terragena. The type strain and the only strain of the genus and species is HKI 0089 (DSM 11295).