Selection of high producer strain, optimization of production medium and cultivation in bioreactor system were carried out in order to produce an antifungal substance, PAFS in large amounts which sources and 41 kinds of nitrogen sources, a synthetic medium consisting of fructose(70 g/1) and ammonium sulfate (10g/l) and a complex medium including galactose(30g/l), fructose(20g/l) and cottonseed flour(35g/l) were determined as opti-mized media for PAFS production. In bioreactor studies examining physiological characteristics of the pro- ducer microorganism with the complex medium, typical pattern of diauxic growth was observed as demonstrated by the result that fructose was not used before almost exhaustion on readily utilizable carbon source, galactose. When galactose was supplemented additionally during the fermentation period. PAFS pro-ductivity did no increases any more, indicating that large portion of the added galactose was used for cell growth instead of biosynthesis of the secondary metabolite. It was deduced that PAFS production could be enhananced by employing fed-batch operation in order to overcome the apparent phenomenon of catabolite repression and /or inhibition.