1. Streptomyces lavendulae ISP-5069 produces racemomycin-A which yields β-lysine as a component on hydrolysis. β-Lysine was derived from an intermediate α, ε-diaminopimelic acid via lysine pathway. Exogenous lysine acted as a donor of β-lysine to form racemomycin-C and-B by S. lavendulae NT-1008 by means of incorporation of ¹⁴C-labeled lysine. 2. Two taxonomically different strains, S. lavendulae NT-1008 and S. albidoflavus S-0003, were selected as the strains producing racemomycin-A, -C, and-B as a mixture. These antibiotics were present both in the intracellular pool and in the broth. 3. Addition of ¹⁴C-racemomycin-A to the culture medium resulted in the incorporation of ¹⁴C into racemomycin-C and-B. Majority of the radioactivity was present in the extracellular racemomycin-C and-B, but a significant portion was present in the intracellular antibiotics. These data indicate that racemomycin-C and-B were transformed stepwisely from racemomycin-A and β-lysine, suggesting an endogenous formation.