The antibiotic, difficidin, and its hydroxylated derivative, oxydifficidin, were synthesized by cultures of Bacillus subtilis grown on a complex medium. Maximum titers of about 200 and 130 mg/L, respectively, were obtained. In fermentations where the dissolved oxygen tension (DOT) was controlled, the maximum specific growth rate was only reduced below 5% air saturation. DOT had little effect on the volumetric rate of synthesis of oxydifficidin but greatly influenced the rate for difficidin, which was reduced at DOT values below 40% air saturation.