To produce a novel antihypertensive angiotensin I-converting enzyme (ACE) inhibitor from yeast, a yeast isolate, designated G-14 showing the highest ACE inhibitory activity was obtained and identified as Malassezia pachydermatis based on morphological, biochemical and cultural characteristics. The maximal extracellular ACE inhibitor production was obtained from M. pachydermatis G-14 when the strain was cultured in YEPD medium containing 0.5% yeast extract, 3.0% peptone and 2.0% glucose at $30^{circ}C$ for 24 h and the final ACE inhibitory activity was 48.9% under the above condition.