Soil samples were collected from Sabah forests soils in Ulu Padas, Lower Segama, Melalap, Maliau Basin, Tabin, Kpg Limau-limauwan and area around Kota Kinabalu. A total of 283 actinomycetes included and 44 microfungi were successfully isolated and purified. These isolates were studied and screened against PP1 inhibitor screening system. Two types of yeast were used as the screening targets against protein phosphatase 1; wild-type yeast which carried GLC7 and mutant yeast which carried a high temperature sensitive glc7 allele (glc7-10). The mutant causes cell cycle arrest and cell wall integrity defect at 31ºC but was rescued by the addition of 1M sorbitol. A potential inhibitor that acted on the wild-type Glc7p will show similar characteristic as the mutant strain. Crude acetone extracts of H7520, H9318 and H9978 demonstrated positive inhibitions on PP1 inhibitor screening system. Enzymatic inhibitor assays were performed by Prof Michael J.R. Stark, where freezedried crude acetone extracts of H9318 and H9978 showed inhibitory activities on PP1 and PP2A while extract H7520 inhibited on PP2A but not PP1. The degree of sensitivity of the potential inhibitors screened against yeast S. cerevisiae, PP1 or PP2A were examined in the haploid-insufficiency test. Strain ASY25 (PPH21/pph21::LEU2 pph22::URA3/PPH22) and ASY27 (glc7::LEU2/GLC7) were both sensitive to freeze-dried crude acetone extract of H9318 and H9978 compare to strain AYS927 (PPH21/PPH21 PPH22/PPH22 GLC7/GLC7). Strain ASY25 was more sensitive to freeze-dried crude acetone extract H7520 compare to strain A YS927 and ASY27. Liquid-liquid extractions were performed and ethyl acetate layer extracts (H7520, H9318 and H9978) exhibited inhibitory activities. Only ethyl acetate layer of H9318 was performed in RP-HPLC. 2 active compounds, S1 and S2 were detected and were fractions out. Fractions S1 and S2 of H9318 showed inhibitory activity on PP1 inhibitor screening system. The degree of sensitivity of the S1 and S2 fractions screened against yeast PP1 or PP2A were examined in the haploid-insufficiency test. Strain ASY27 showed higher sensitivity to fraction S2 compared to other diploid strains. For fraction S1, strain ASY25 was more sensitive than strains AYS927 and ASY27. S1 and S2 inhibited both PP1 and PP2A on enzymatic inhibitor assay. In yeast (S. cerevisiae) cell cycle, fraction S1 showed similar effect as pph22 mutant (binucleate in mother cell) and accumulate multiple nuclei. Fraction S2 showed similar effect as glc7-10 (displays aberrant bud morphology) and also nucleus fragmentation. With the help from Dr Linda Morris and Ling-say Wong, the active fractions of S1 and S2 were identified using MS. The proposed partial structures of these 2 fractions were tripeptides, S1 was a tripeptide-copper complex, GHC (Glycine-His tidine-Cystein) and incorporate with copper ion while S2 had 2 tripeptides and both without any incorporate ion, GHC and GHK (Glycine-Histidine-Lysine).