A gram-positive Bacillus sp. that fluoresces yellow under long-wavelength UV light on several common culture media was isolated from soil samples. On the basis of carbon source utilization studies, fatty acid methyl ester analysis, and 16S ribosomal DNA analysis, this bacterium was most similar to Bacillus megaterium. Chemical extraction yielded a yellow-orange fluorescent pigment, which was characterized by X-ray crystallography, mass spectrometry, and nuclear magnetic resonance spectroscopy. The fluorescent compound, chlorxanthomycin, is a pentacyclic, chlorinated molecule with the molecular formula C22H15O6Cl and a molecular weight of 409.7865. Chlorxanthomycin appears to be located in the cytoplasm, does not diffuse out of the cells into the culture medium, and has selective antibiotic activity.