A inhibitor acting on substrate proteolytic enzyme was isolated from culture broth of Streptomyces sp. SK-862, which had been isolated from soil in Wonju City, by using the colloidal agar medium. The optimum culture temperature and initial pH for the production of the protease inhibitor was 28$^{circ}C$ and pH 8.5, respectively. The optimum culture medium was composed of 1.5% glucose, 0.5% peptone, 0.1% K2PHO4, 0.05% CaCO3 and initial pH 8.5. The inhibitor production was maximum when the strain was incubated in shaking incubator at 70 strokes for 60 hours.