Streptomycetes are Gram-positive microorganisms producing secondary metabolites through unique physiological differentiation [4]. The microbes show unusual morphological differentiation to form substrate mycelia, aerial mycelia, and arthrospores on solid medium [19]. Substrate mycelium growth is sustaining with sufficient nutrients in the culture medium. The concentration of a specific individual substrate in the culture environment is the most important extracellular factor allowing vegetative mycelia growth, where extracellular hydrolytic enzymes participate in the utilization of waterinsoluble substrates. However, with starvation of nutrients in the culture medium, the vegetative mycelia differentiate to aerial mycelia and spores. It has been considered that shiftdown of essential nutrients for mycelia growth is the most important factor triggering morphological and physiological differentiation in Streptomyces spp. Since proteineous macromolecule compounds are the major cellular components, these are faced to endogenously metabolize following a severe depletion of nitrogen source in culture nutrients (Fig. 1). Various proteases were identified of which production was specifically related with the phase of mycelium growth and also morphological differentiation. The involvement of proteases and protease inhibitor is reviewed as a factor explaining the mycelium differentiation in Streptomyces spp.