A moderately halophilic actinomycetes strain, designated as WH26, was isolated from Weihai Solar Saltern in China. The identification of the strain WH26 was performed by its morphological characteristics, physiological and biochemical tests as well as phylogenetic analysis based on 16S rRNA sequence comparison. The results showed that the nucleotide sequence of the 16S rRNA gene (1,677 bp) of the strain WH26 exhibited close similarity (97-99 %) with other Streptomyces 16S rRNA genes and the strain WH26 was identified to belong to the genus Streptomyces. An ethyl acetate extraction of Streptomyces sp. nov. WH26 demonstrated significant cellular toxicity. Two compounds, 8-O-methyltetrangulol and naphthomycin A were isolated from the extract via silica gel column chromatography and HPLC. These two compounds showed potent cytotoxic activity against several human tumor cell lines including A549, HeLa, BEL-7402 and HT-29. The present studies suggest that moderately halophilic actinomycetes may be a novel biological source for the discovery of anticancer agents.