Antibiotic substances produced by a Bacillus subtilis isolate from the xylem of an American elm (Ulmus americana L.) inhibited several fungal plant pathogens including the Dutch elm disease pathogen, Ceratocystis ulrni. Bioassays indicated the bacterium produced a diffusible, methanol-soluble antibiotic on potato dextrose agar at 30 °C. Cellulose powder column chromatography separated the antibiotic, which was further purified on a Sephadex LH-20 column, yielding two peaks of antibiotic activity, BS1 and BS2. These were further purified by paper chromatography. High-performance liquid chromatography, using C-18 reverse phase chromatography under isocratic conditions, resulted in five 280-nm absorbing peaks. Only one peak contained antibiotic activity. Upon ultrafiltration, the antibiotics passed through a 500 mol. wt. filter. The antibiotic was soluble in water, absolute methanol, ethanol, and chloroform but not in hexane or petroleum ether. Antimicrobial activity differed from that of other B. subtilis antibiotics including iturin A, bacillomycin L, mycosubtilin, fengycin, and bacilysin. Ceratocystis ulmi exposed to BS1 produced short, twisted, and swollen hyphae with irregularly thickened cell walls.