An alkaline fraction separated by ion exchange chromatographies from the water extract of Panax ginseng root stimulated the proliferation of baby hamster kidney-21 cells. Separation of the alkaline fraction by MCI-gel CHP 20P column chromatography followed by dialysis provided an active material. By a reversed-phase HPLC the active material was separated into six fractions, and an active colorless compound 1 was obtained from fraction 2 in a pure state. Compound 1 was composed of the following amino acids; Gly, Arg, Glu, Val in a ratio of 1:1:1:1, and caused 20% enhancement of proliferation of BHK-21 cells at a concentration of 3.40 microM. On the basis of physical and spectral data the structure of compound 1 was established as a tetrapeptide, Gly-Arg-gamma-Glu-Val-NH2.