A program of screening a wide range of fungi for ability to "ferment" glucose and various agricultural wastes and surpluses in submerged culture revealed that species ofUstilagowere capable of rapid dissimilation of carbohydrates with the production of (1) a complex substance appearing as long needlelike optically active crystals in the culture mixture, (2) fats and sterols, and (3) a range of new antibiotic substances designated as Ustizeain A, B, etc. The yields of (1) and (2) are closely related and together they constitute the major portion of the by-products of metabolism of the smut. The antibiotics (3) are stable and effectivein vitroagainst Gram-positive bacteria such asBacillus subtilisandMycobacterium smegmatis; against Gram-negativeBrucella bronchiseptica; and against many fungi including species ofAspergillus nigerandA.flavusgroups, certain penicillia,Verticillium, and many other Fungi Imperfecti.