Streptomyces sp. MCY-846 selected by in vitro cytotoxicity assay produced elaiophylin. Individual characteristics of the strains such as spore morphology, and physiological characteristics indicated that the strain is resembled to Streptomyces hygroscopicus. The time course of cell growth and antibiotic production was observed in the medium containing 0.5% trehalose and 0.5% soybean meal as carbon and nitrogen sources, respectively. The optimum production of elaiophylin was tested with different combinations of carbon and nitrogen sources and reached a maxima of $470{mu}$/ml in the PC-II medium.