Studies were undertaken to isolate and screen the lovastatin producing fungi from the North Maharashatra region. Out of 30 isolated fungi 11 were exhibited zone of inhibition against Candida albicans. Of all the 11 strains investigated Aspergillus terreusPM3 exhibited highest zone of inhibition against Candida albicans and yielded 90 mg/l of lovastatin at 10 days in submerged cultures. Employing whole soybean flour medium A.terreus PM3 yielded 90 mg of lovastatin per lit. at 10 days. It was observed that diameter of zone of inhibition in bioassay was directly proportional to yield of lovastatin. Medium optimization experiments with A. terreus PM3 indicated that lactose and defatted soybean flour were best carbon and nitrogen sources respectively.