The three independent variables, viz concentration of carbon source (glucose), concentration of nitrogen source (soybean meal) and temperature of incubation were found to be the most important for production of antifungal antibiotic by the isolate Thermomonospora sp MTCC 3340 from one-factor-at-a-time study. These variables were varied at three levels in a total number of 27 experiments designed using full factorial design. The results on analysis using the statistical software SPSS (version 6.0) indicated that the optimum combination of the three factors for the maximum yield of the antibiotic was concentration of carbon source (glucose) 2%, concentration of nitrogen source (soybean meal) 1% and temperature of incubation 30degreesC. A close fit between experimental and predicted values of the antifungal yield was obtained using one of the modes derived from the statistical analysis, indicating that this model was applicable to this production. (C) 2003 Society of Chemical Industry.