Angiotensin I-converting enzyme (ACE) inhibitors have generally been very useful to remedy or prevent hypertension. This study describes the extraction and characterization of an ACE inhibitor from the fruiting body of Pholiota adiposa ASI 24012, which can be used as an antihypertensive drug. The maximal ACE inhibitory activity $(IC_{50};0.25mg)$ was obtained when the fruiting body of Pholiota adiposa ASI 24012 was extracted with distilled water at $30^{circ}C$ for 12 h. After the purification of ACE inhibitor with ultrafiltration, Sephadex G-25 column chromatography, and reverse-phase HPLC, an active fraction with an $IC_{50}$ of 0.044 mg was obtained. The purified ACE inhibitory peptide was a novel pentapeptide, showing very little similarity to other ACE inhibitory peptide sequences. The molecular mass of the purified ACE inhibitor was estimated to be 414 daltons with a sequence of Gly-Glu-Gly-Gly-Pro, and showed a clear antihypertensive effect on spontaneously hypertensive rats (SHR) at a dosage of 1 mg/kg.