To develop a strategy for improved production of clavulanic acid (CA), we investigated the effect of using oils on cell growth and CA production during the fermentation of Streptomyces clavuligerus NRRL 3585. In this analysis, triolein, whose fatty acid is oleic acid only, was the best oil source for CA production, but free fatty acids generated from the hydrolysis of oils in a culture broth negatively impacted CA production and cell growth. Hence, we screened for mutants that were resistant to high concentrations of oleic acid. From this screen we identified a mutant S. clavuligerus, OL13, that had a minimum inhibitory concentration (MIC) to oleic acid of 2.1 g/l, much higher than that of S. clavuligerus NRRL 3585, at 0.4 g/l. Not only was cell growth improved, but maximum CA production, at 1,950 mg/l, was approximately 2.0-fold higher than that of the parent strain.