FK973, a new, substituted dihydrobenzoxazine (11-acetyl-8-carbamoyloxymethyl-4-formyl-14-oxa-1,11-diazatetracyclo[7.4.1.02,7.010,12]tetradeca-2,4,6-trien-6,9-diyl diacetate), was obtained by chemical modification of a novel antibiotic which was isolated from the fermentation products of Streptomyces sandaensis No. 6897. FK973 had cytotoxic effects against in vitro cultured human and murine tumor cells. FK973 in doses of 0.032–5.6 mg/kg (i.p.) had stronger antitumor activities and higher chemotherapeutic ratio than mytomycin C against such murine ascitic tumors as P388 and L1210 leukemia, B16 melanoma, M5076 reticulum cell sarcoma of ovarian origin, Colon 26 carcinoma, Ehrlich carcinoma, and MH134 hepatoma. In tests against murine and human solid tumors implanted s.c. in normal mice and nude mice, respectively, FK973 (i.v.) inhibited growth of murine tumors (M5076 sarcoma, Colon 38 carcinoma, B16 melanoma, and Lewis lung carcinoma) by 66–100% and human tumors (LX-1 lung, MX-1 mammary, and SC-6 stomach carcinoma) by 84–99%. In studies with drug-resistant P388 leukemia, FK973 was also effective against vincristine-resistant P388, moderately effective against mitomycin C (MMC)- and adriamycin-resistant P388, and partially effective against cyclophosphamide-resistant P388 cells in mice. Leukopenic effects of FK973 and MMC in mice were comparable at doses which gave antitumor activity almost equally. FK973 had no effect on the numbers of platelets and red blood cells, whereas MMC markedly decreased both. FK973 decreased the numbers of colony forming units in spleen and in culture and the effect was less than that of MMC. Therefore, FK973 may give weaker myelosuppression than MMC. The results suggest that FK973 will be a beneficial drug for the treatment of cancer.