Microorganisms, especially endophytic fungi that reside in the tissue of living mangrove plants, seem to play a major role in meeting the general demand for new biologically active substances. During the course of screening for biologically active secondary metabolites from marine microorganisms, an antibiotic compound containing an indole and a diketopiperazine moiety was isolated from the culture medium of Penicillium chrysogenum, (MTCC 5108), an endophytic fungus on the mangrove plant Porteresia coarctata (Roxb.). The cell free culture medium of P. chrysogenum showed significant activity against Vibrio cholerae, (MCM B-322), a pathogen causing cholera in humans. Bioassay guided chemical characterization of the crude extract led to the isolation of a secondary metabolite possessing a molecular formula C sub(19)H sub(21)O sub(2)N sub(3). Its antibacterial activity was comparable with standard antibiotic, streptomycin. This compound (1) was found to be (3,1'-didehydro-3[2"(3'",3'"-dimethyl-prop-2-enyl)-3"-indolylmethylene]-6-methyl pipera-zine-2,5-dione) on the basis of mass spectrometry, infrared spectroscopy and one and two-dimensional nuclear magnetic resonance analysis.