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Several isolates of Streptomyces species, suppressive against fungal growth and obtained from light-coloured Sphagnum peat, produced polyene antibiotics. The mechanism of growth suppression by these isolates is probably partially explained by antibiosis, since there was a significant difference in the antibiotic production by suppressive vs. non-suppressive isolates. The antibiotic consists of several individual components, which form an aromatic heptaene complex of the candicidin type containing p-aminoacetophenone and mycosamine moieties. The minimum inhibitory concentration (MIC) of the antibiotic against yeasts and fungi was the same as that of candicidin.