Actinomycetes are well-known for producing numerous bioactive secondary metabolites. In this study, primary screening by antifungal activity assay found one actinomycete strain WA23-4-4 isolated from the intestinal tract of Periplaneta americana that exhibited broad spectrum antifungal activity. 16S rDNA gene analysis of strain WA23-4-4 revealed close similarity to Streptomyces nogalater (AB045886) with 86.6% sequence similarity. Strain WA23-4-4 was considered as a novel Streptomyces and the 16s rDNA sequence has been submitted to GenBank (accession no. KX291006). The maximum antifungal activity of WA23-4-4 was achieved when culture conditions were optimized to pH 8.0, with 12% inoculum concentration and 210 ml ISP2 medium, which remained stable between the 5th and the 9th day. 3-Acetyl benzoyl amide was isolated by ethyl acetate extraction of WA23- 4-4 fermentation broth, and its molecular formula was determined as C9H9NO2 based on MS, IR, 1H, and 13C NMR analyses. The compound showed significant antifungal activity against Candida albicans ATCC 10231 (MIC: 31.25 μg/ml) and Aspergillus niger ATCC 16404 (MIC: 31.25 μg/ml). However, the compound had higher MIC values against Trichophyton rubrum ATCC 60836 (MIC: 500 μg/ml) and Aspergillus fumigatus ATCC 96918 (MIC: 1,000 μg/ml). SEM analysis showed damage to the cell membrane of Candida albicans ATCC 10231 and to the mycelium of Aspergillus niger ATCC 16404 after being treatment with 3-acetyl benzoyl amide. In conclusion, this is the first time that 3-acetyl benzoyl amide has been identified from an actinomycete and this compound exhibited antifungal activity against Candida albicans ATCC 10231 and Aspergillus niger ATCC 16404.