The antibiotic albomycin is transported into cells of Escherichia coli K-12 by the same uptake system as the iron-supplying ferrichrome complex. The iron-complexing hydroxamate moieties of albomycin and ferrichrome are structurally similar. During the phase of rapid iron uptake the chelators were not found in the cells. In order to understand the antibiotic activity of albomycin, it was labeled in the hydroxamate with tritium and in the presumed antibiotically active area with radioactive sulfur. While the tritium label was not retained by the cells, part of the sulfur label was taken up and concentrated 500-fold within the cell. The sulfur was not incorporated into proteins or nucleic acids since it was recovered as a low molecular weight component. Gel filtration on Bio-Gel P-2 revealed one tritium-labeled and two sulfur-labeled cleavage products in the incubation medium. We conclude that albomycin is actively transported via its ferrichrome-like portion into the cells and that the growth-inhibitory moiety is released by hydrolysis intracellularly and remains there.