Rapamycin was known to have the functions of being an antibiotic and immunosuppressant; recently it was also recognized as being able to retard the aging process. The effects of dissolved oxygen (DO) level on rapamycin production by pellet-form of Streptomyces hygroscopicus were investigated in this study. The results suggest that a high DO level is required to enhance rapamycin production. However, the premise for getting a high rapamycin concentration by using DO control was keeping the intact of pellet-form of S. hygroscopicus. What if the high DO level achieved was coming from the increase of agitation; it might break down the morphology of pellets-form in the fermentation tank and result in the decrease of rapamycin production. The maximum rapamycin obtained in this study was about 780 mg/L in the 5 L fermentor batch with DO controlled over 30%, with the supplement of pure oxygen in the inlet gas, and the agitation speed limited to less than 200 rpm. Conclusively, a high DO level and the morphology of pellets form both were detrimental to achieving a high rapamycin production by S. hygroscopicus in the agitation fermentor.