Screening for microbial metabolites that induce transcriptional activation of the SV40 promoter resulted in the identification of two known compounds, FR901228 and trichostatin A (TSA). FR901228 is a potent antitumor drug that is currently under clinical investigation. TSA is a specific inhibitor of histone deacetylase. Despite structural unrelatedness, both FR901228 and TSA greatly enhanced the transcriptional activity of the SV40 promoter in an enhancer-dependent manner. The effects of FR901228 on the cell cycle, chromatin structure, and histone acetylation were examined and compared with those of TSA. Both compounds caused arrest of the cell cycle at both G1 and G2/M phases and induction of internucleosomal breakdown of chromatin. FR901228, like TSA, inhibited intracellular histone deacetylase activity, as a result of which marked amounts of acetylated histone species accumulated. FR901228 is therefore a new type of histone deacetylase inhibitor, whose chemical structure is unrelated to known inhibitors such as trichostatins and trapoxins.