FR258900 is a novel glycogen synthesis activator produced by Fungus No. 138354. This compound was isolated from the culture broth by solvent extraction and reverse-phase column chromatography. FR258900 stimulated glycogen synthesis and glycogen synthase activity in primary rat hepatocytes. FR258900 exhibited a potent inhibitory effect on the activity of liver glycogen phosphorylase, suggesting that this compound may activate hepatic glycogen synthesis via glycogen phosphorylase inhibition. Thus, this glycogen phosphorylase inhibitor may be useful in the treatment of postprandial hyperglycemia in type 2 diabetes.