An inhibitor of cyclic adenosine 3', 5'-monophosphate (cAMP) phosphodiesterase was isolated from the culture filtrate of Bacillus subtilis C-756 isolated from soil. It was purified and finally separated into three fractions by reverse-phase HPLC. The respective fractions were designated as APD-I, -II and -III in the order eluted and the relative quantities of APD-I, -II and -III were approximately 10%, 40% and 50%, respectively. They were acylpeptides composed of β-hydroxy fatty acid residues and heptapeptide. Though the amino acid compositions of the peptides were the same, the fatty acid residues were all different. APD-I contained a mixture of 3-hydroxy-11-methyldodecanoic acid (i-C₁₃h³) and 3-hydroxy-10-methyldodecanoic acid (α-C₁₃h³). APD-II contained 3-hydroxytetradecanoic acid (n-C₁₄h³). APD-III contained a mixture of 3-hydroxy-13-methyltetradecanoic acid (i-C₁₅h³) and 3-hydroxy-12-methyltetradecanoic acid (α-C₁₅h³).