Poststatin, a new inhibitor of prolyl endopeptidase, has been isolated from the culture broth of Streptomyces viridochromogenes MH534-30F3. The structure of poststatin was defined as L-valyl-L-valyl-3-amino-2-oxovaleryl-D-leucyl-L-valine by analysis of spectral properties and chemical studies of poststatin and its derivatives. The alpha-keto group of postine in poststatin plays the most important role on the inhibitory mechanism.