Endophytic actinobacteria are relatively unexplored as potential sources of novel species and novel natural products for medical and commercial exploitation. Xishuangbanna is recognized throughout the world for its diverse flora, especially the rain forest plants, many of which have indigenous pharmaceutical histories. However, little is known about the endophytic actinobacteria of this tropical area. In this work, we studied the diversity of actinobacteria isolated from medicinal plants collected from tropical rain forests in Xishuangbanna. By the use of different selective isolation media and methods, a total of 2,174 actinobacteria were isolated. Forty-six isolates were selected on the basis of their morphologies on different media and were further characterized by 16S rRNA gene sequencing. The results showed an unexpected level of diversity, with 32 different genera. To our knowledge, this is the first report describing the isolation of Saccharopolyspora, Dietzia, Blastococcus, Dactylosporangium, Promicromonospora, Oerskovia, Actinocorallia, and Jiangella species from endophytic environments. At least 19 isolates are considered novel taxa by our current research. In addition, all 46 isolates were tested for antimicrobial activity and were screened for the presence of genes encoding polyketide synthetases and nonribosomal peptide synthetases. The results confirm that the medicinal plants of Xishuangbanna represent an extremely rich reservoir for the isolation of a significant diversity of actinobacteria, including novel species, that are potential sources for the discovery of biologically active compounds.The class Actinobacteria accounts for a high proportion of soil microbial biomass and contains the most economically significant prokaryotes, producing more than half of the bioactive compounds in a literature survey (46), including antibiotics (6), immunosuppressive agents (55), antitumor agents (18), and enzymes (64). Actinobacteria belonging to the genus Streptomyces, in particular, are excellent producers. The emergence of drug resistance in many bacterial pathogens and the current increase in the number of fungal infections has caused a resurgence of interest in finding new reserves of biologically active compounds (63). As the search for novel natural products continues, it becomes apparent that the rate of discovery of new compounds from soil streptomycetes has decreased, whereas the rate of reisolation of known compounds has increased (28). Recently, evidence has accumulated that rare actinomycete species, which are often very difficult to isolate and cultivate, might represent a unique source of novel biologically active compounds (4). On the other hand, new microbial habitats need to be examined in the search for novel bioactive compounds. One biologically important but relatively overlooked niche is the inner tissues of higher plants. Early studies have demonstrated that some actinobacteria can form intimate associations with plants and colonize their inner tissues. Frankia species and Streptomyce...