Bacillus badius isolated from soil has been identified as potential producer of penicillin G acylase (PGA). In the present study, batch experiments performed at optimized inoculum size, temperature, pH, and agitation yielded a maximum PGA of 9.5 U/ml in shake flask. The experiments conducted in bioreactor with different oxygen flow rates revealed that 0.66 vvm oxygen flow rate could be sufficient for the maximum PGA activity of 12.7 U/ml. From a detailed investigation on the strategies of the addition of phenyl acetic acid (PAA) for increasing the production of PGA, it was found that the controlled addition of 10 ml of 0.1 % (w/v) PAA once in every 2 h from 6th hour of growth showed the maximum PGA activity of 32 U/ml. Thus, our studies for the first time showed that at concentration above 0.1 % (w/v) PAA, the PGA production decreased. This selective condition paves the way for less costly bioprocess for the production of PGA.