A marine Streptomyces sp., which produce water-soluble blue pigment was isolated from shallow-sea muds. The effect of various nutritional conditions on growth of isolated strain were investigated to facilite the potential use of this organism in industry. The effect of carbon source was characterized as a 10g/1 of soluble starch. Growth was optimum at pH 7.0 and slightly affected with more alkaline range but was shown to decrease dramatically in acidic range. Under the optimum growth conditions, isolated strain produced substantial amounts of blue pigment and biomass.