Both crude exo-biopolymers and mycelial biomass, produced by liquid culture of Cordyceps species, are believed to possess several potential health benefits. As a result of its known biological activities, Cordyceps militaris has been extensively characterized in regards to potential medicinal applications. However, optimized liquid culture conditions for enhanced polysaccharide productivity have yet to be developed, which is a necessary step for industrial applications. Therefore, in this study, the liquid culture conditions were optimized for maximal production of mycelial biomass and exo-polysaccharide (EPS) by C. militaris The effects of medium composition, environmental factors, and C/N ratio were investigated. Among these variables 80 g, glucose; 10 g, yeast extract; 0.5 g, $MgSO_4cdot7H_2O$; and 0.5 g, $KH_2PO_4$ in 1 L distilled water were found to be the most suitable carbon, nitrogen, and mineral sources, respectively. The optimal temperature, initial pH, agitation, and aeration were determined to be $24^{circ}C$, uncontrolled pH, 200 rpm, and 1.5 vvm, respectively. Under these optimal conditions, mycelial growth in shake flask cultures and 5 L jar bioreactors was 29.43 and 40.60 g/L, respectively, and polysaccharide production in shake flask cultures and 5 L jar bioreactors was 2.53 and 6.74 g/L, respectively.