Two bacterial strains isolated from different hospitals in Japan were subjected to a polyphasic analysis. Strains IFM 0406 and IFM 0706(T), producers of novel terpenoid antibiotics, were found to have morphological, biochemical, physiological and chemotaxonomic properties consistent with their classification in the genus Nocardia, except for the presence of MK-8(H(4)) as one of the predominant menaquinones in addition to the major menaquinone MK-8(H(4 omega-cyc)). The 16S rRNA gene sequence similarity of strains IFM 0406 and IFM 0706(T) was 99.9 %, and the closest members of Nocardia to these strains were the type strains of Nocardia nova and Nocardia mexicana, showing similarity of 97.5 and 97.1 %, respectively. Based on their characteristic phenotypic and phylogenetic properties, a novel species of the genus Nocardia, Nocardia terpenica sp. nov. is proposed for the two strains. The type strain is IFM 0706(T) (=JCM 13033(T)=DSM 44935(T)=NBRC 100888(T)).