Researchers in the United States believe medication can be developed from bugs living in soil.
They have identified genes in these bacteria which play a key role in producing anti-cancer chemicals.
They believe the finding could help in the development of new drugs to fight certain cancers.
Professor Jon Thorson and colleagues at the University of Wisconsin-Madison made their discovery after analysing soil bacteria from North America and China.
Natural toxins
The bugs produce a toxin known as enediynes. These natural chemicals are among the most effective anti-cancer agents known.
However, their genetic make-up is very complex. This has made it very difficult for the toxin to be adapted for use in medication.
But the researchers have now identified how the toxin is produced.
Professor Ben Shen, one of those involved in the research, said: "We've found the genetic raw material to produce these compounds."
He added: "With the genes in hand, we can take them apart and put them back together and that will allow improvements in production and development of new compounds to treat cancer."
These toxics are very effective in killing cancer tumours. The work by cutting through the tumours DNA and are more than 1,000 times more potent than some drugs currently being used.
Professor Thorson said: "This molecule is so potent that it has to be directed to a particular target."
He added: "With this, all you need are one of two molecules and you can kill the [cancer] cell.
"These are different than most anti-cancer agents out there."
A form of the toxin is used in medication to treat some types of leukaemia.
The study is published in the journal Science.