Zalerion arboricola ATCC 20868 produces pneumocandin A₀ (L-671, 329), a cyclic hexapeptide with a dimethylmyristic acid side chain. This compound has anti-candida and anti-pneumocystis activities. We were interested in looking for other related compounds produced by this organism. To facilitate this search, a simple medium (S2) composed of D-mannitol, peptonized milk, lactic acid, glycine, KH₂PO₄ and trace elements, which supported the production of a number of such compounds, was designed. For the isolation of mutants, either spores or growing mycelia were treated with N-nitroso-N-methylurethane or N-methyl-N'-nitro-N-nitrosoguanidine and survivors were screened for changes in the product spectrum. From approximately 1, 500 survivors tested, 5 mutants were isolated. Mutants ATCC 20957, 74030, 20958 and 20988 exclusively produce various pneumocandins other than A₀. These compounds were active against Candida and Pneumocystis carinii. The yield of A₀ was found to be increased 2.5-fold over that of the parent in the fifth mutant, MF5415. Further medium studies indicated that the addition of soybean oil to S2 medium improved the yields. Subsequent development of another series of media containing Pharmamedia as a nitrogen source resulted in increase in production by 10--20-fold. Overall, these studies resulted in substantial improvement in the production of A₀ as well as discovery and/or facile production of 7 other related compounds.