Hospital-acquired infections caused by drug-resistant bacteria are a significant challenge to patient safety. Numerous clinical isolates resistant to almost all commercially available antibiotics have emerged. Thus, novel antimicrobial agents, specifically those for multidrug-resistant Gram-negative bacteria, are urgently needed. In the current study, we report the isolation, structure elucidation, and preliminary biological characterization of a new cationic lipopeptide antibiotic, battacin or octapeptin B5, produced from a Paenibacillus tianmuensis soil isolate. Battacin kills bacteria in vitro and has potent activity against Gram-negative bacteria, including multidrug-resistant and extremely drug-resistant clinical isolates. Hospital strains of Escherichia coli and Pseudomonas aeruginosa are the pathogens most sensitive to battacin, with MICs of 2 to 4 μg/ml. The ability of battacin to disrupt the outer membrane of Gram-negative bacteria is comparable to that of polymyxin B, the last-line therapy for infections caused by antibiotic-resistant Gram-negative bacteria. However, the capacity of battacin to permeate bacterial plasma membranes is less extensive than that of polymyxin B. The bactericidal kinetics of battacin correlate with the depolarization of the cell membrane, suggesting that battacin kills bacteria by disrupting the cytoplasmic membrane. Other studies indicate that battacin is less acutely toxic than polymyxin B and has potent in vivo biological activity against E. coli. Based on the findings of the current study, battacin may be considered a potential therapeutic agent for the treatment of infections caused by antibiotic-resistant Gram-negative bacteria.