A new microbial strain showing broad spectrum antibacterial and antifungal activity was isolate from soil of Chhattisgarh and characterized as Streptomyces rimosus MTCC 10792 (gene sequence similarity 99.52%). The antibacterial compound was produced by the isolate purified by silica gel chromatography and chemically characterized as oxytetracycline and production of the antibiotic was statistically optimized using response surface methodology. The three independent variables, namely concentrations of glucose (10 g/l), soybean meal (10 g/l), and calcium carbonate (1 g/l) were found to be the most important for production antibiotic by a one-factor-ata-time study. For optimization, the individual and interaction effects of the studied variables were evaluated by response surface methodology (RSM) using central composite design (CCD). Antibiotic production was increased nearly ten times (470 mg/l) as compared with the normal unoptimized production medium (47 mg/l) by applying statistical design.