A new antitumor antibiotic, U-43,120 was discovered. It is produced by fermentation of a new species of Streptomyces, designated Streptomyces paulus DIETZ sp. n. Its antimicrobial activity is limited to bacteria. A microbiological assay with Bacillus subtilis was developed that can be detect concentrations of 1 approximately 2 mug/ml of the drug in fermentation liquors. U-43,120 was active in vivo against P-388 leukemia in mice.