Hydroheptin, a new polyene macrolide antifungal antibiotic, is co-produced with the antibiotic, chartreusin, by a strain of Streptomyces chartreusis designated as IMRU 3962 isolated in our laboratory. The unique water-solubility of this antibiotic at neutrality, revealing in aqueous solution molecular dispersion and an ultraviolet-visible absorption spectrum characteristic of an all-trans heptaene chromophore, clearly distinguishes it from all previously-described and naturally-occurring heptaene macrolides. The isolation and identification of the amino sugar, mycosamine (3-amino-3,6-dideoxy-D-mannose), in acid hydrolysates of hydroheptin and the absence of an aromatic amine upon retrograde alkaline dealdolization of the molecule certainly characterize the antibiotic as a member of the non-aromatic heptaene macrolide group. Chromatographic and countercurrent distribution studies likewise support its novelty. With little or no demonstrable activity against bacteria, hydroheptin as compared to other non-aromatic heptaene macrolides exhibits excellent but somewhat less activity against a wide variety of yeasts and fungi. Likewise, its parenteral toxicity appears to be less than that of other heptaene macrolides.