Leupeptin (N-acetyl-L-leucyl-L-leucyl-L-argininal) was produced as an extracellular metabolite by Streptomyces lavendulae. Addition of lysine to the growth medium stimulated leupeptin production from 200 to 1400 micrograms/ml. Incubation of late exponential phase mycelium in a synthetic medium was used to prepare single labelled (3H) and double labelled (3H/14C) inhibitor for metabolic studies. An improved purification scheme that generates leupeptin of high purity with good recoveries is also reported.