Oxytetracycline (OTC) is a macrolide broad spectrum antibiotic produced widely by microbial fermentation using Streptomyces Species. In the present study, pretreated sugar cane molasses (SCM), an industrial crop by-product was used as main substrate for the production of OTC from Streptomyces rimosus NCIM 2213. Four different pretreatment methods and their combinations were applied to SCM to remove the heavy metals and toxins. Sulfuric acid treated molasses was found effective based on the cell mass and OTC yield. The enhanced production of OTC was achieved by statistical optimization using Central composite design with four chosen variables. From the second order polynomial equation, the optimum OTC concentration was attained by 537.73 mg/l from S.rimosus in sulfuric acid treated sugar cane molasses. To the best of our knowledge this is the highest yield of OTC obtained in submerged fermentation process. The Spectral characterization of purified OTC by UV, FTIR, 1H NMR and 13C NMR confirmed that the structure is to be homologous to the standard sample. Purified fraction was also showed remarkable antimicrobial activity against various Gram positive and Gram negative organisms.