A bestatin analogue, (2S,3R)-3-amino-2-hydroxy-4-phenylbuta- noyl-L-valine (AHPA-Val), from the culture filtrate ofStreptomyces neyagawaensisSL-387 was obtained in a chemically defined medium containing DL-3-amino-3-phenylpropionic acid. AHPA-Val was 6 times (IC50= 1.2/μ/ml) as strong as bestatin (IC5O= 7.0/μ/ml) against porcine kidney microsomal aminopeptidase N, and 4 times (5.6/μ/ml) as strong as bestatin (IC5O= 20.7 /*g/ml) against aminopeptidase N of human metastatic fibrosarcoma HT1080. To the best of our knowledge, this is the first report on the microbial production of AHPA-Val.