During the screening for the antifungal compounds against Phytophthora capsici causing phytophthora blight of red pepper, we isolated a strong active compound, bafilomycin $C_1$, produced by strain 3D3. The producing organism was identified as Streptomyces sp. based on taxonomic studies. The antifungal compound was purified from culture broth by HP-20 column chromatography, ethylacetate extraction, silica gel column chromatography and HPLC, and was identified as bafilomycin $C_1$ by color reaction, UV and $^{1}H$-NMR spectral data analysis. Bafilomycin $C_1$ showed strong antifungal activity against various phytopathogenic fungi.