FR112123 is a new oligopeptide antibiotic produced by Streptomyces viridochromogenes No. 7587. The structure of FR112123 is elucidated as N-(N6-(N2-glycyl-L-glutaminyl)-D-lysyl)-D-alanine (1) by spectroscopic and chemical evidence. It resembles a partial structure of peptidoglycan in bacteria. The compound has a superior activity against an Escherichia coli mutant sensitive to inhibitors of cell wall synthesis, although it has a weak activity against the parent strain. These suggest that FR112123 might act on the biosynthesis of bacterial cell wall.