A novel nonsteroidal aromatase inhibitor, TAN-931, was isolated from the culture filtrate of a soil isolate fungus, No. 8974. The strain was identified as Penicillium funiculosum No. 8974. TAN-931 inhibited human placental and rat ovarian aromatase activity, and the IC50 value was 17.2 and 162-mu-M, respectively. The inhibition of human placental aromatase was uncompetitive with respect to androstenedione conversion with a Ki value of 40-mu-M. When TAN-931 was subcutaneously administered at doses of 25, 50 and 100 mg/kg (once/day, x4) to a 20-day-old female Sprague-Dawley rats treated with gonadotropin, the plasma estradiol-17-beta level and the weight of ovaries and uterus were markedly reduced in a dose-dependent manner. The in vivo inhibitory activity of TAN-931 was more potent than that of 4-hydroxyandrostenedione. Consecutive administration of TAN-931 (100 mg/kg, sc, twice/day, x7) to 9-week-old male Sprague-Dawley rats did not induce any adrenal hypertrophy even though administration of aminoglutethimide caused 2-fold enlargement of the adrenal under the same conditions. Specific binding of TAN-931 to the estrogen receptor from a human breast cancer cell line, MCF-7, was not detected.