A number of strains of Oidiodendron truncatum was shown to produce a new antibiotic, PR-1350, which was isolated in the form of an amorphous powder either directly or via a crystalline monomethanolate, PR-1381, which in solution is reconverted to the parent compound. The antibiotic inhibits a broad spectrum of Gram-positive and Gram-negative bacteria in vitro, and has been shown to be active against P-388 lymphocytic leukemia in mice. Biosynthetic considerations based on the results of [1-13C]acetate incorporation indicate that the antibiotic is a diterpene of the clerodane type.