The influence of the physiological factors on the production of antibacterial metabolite by two actinomycetes strains, LAM1 and LAM2 isolated from fresh water systems of Karimnagar were studied.LAM1 showed highest antibacterial activity after seven days of incubation while LAM2 after ten days of incubation at 30°C. Optimization of antibacterial metabolites in batch cultures has been carried out. All the strains were able to grow in all the tested carbon sources. However maximum zone of inhibition was observed when cultures supplemented with glycerol as a carbon source followed by glucose and starch. Cultures containing fructose and maltose did not show any zone of inhibition. The cultures supplemented with sodium nitrate and potassium nitrate have shown highest zone of inhibition followed by peptone. The presence of iron and manganese could play an important role in the promotion of antibiotic production.