In recent years, there has been an increasing trend towards identification of more efficient antifungal drugs owing to the increased incidence of fungal infections (Andriole, 2000; Odd, 2003; Mathew and Nath, 2009). The present study indicated that the bacterial isolates have considerable antifungal activity against Saccharomyces cerevisiae. Increases of diameters of the yeast growth inhibition zones around the bacterial cell mass with increase in incubational periods suffest that antifungal bacterial exoproducts had continued to be produced in later phases of the bacterial growth. When Candida sp. was exposed to four times concentrated cell free cultural fluid on Sabouraud agar surface, growth of the yeast was inhibited following more or less the same pattern in terms of bacterial incubation periods as discussed for S. cerevisiae. Over the last decade, the incidence of fungal infections has increased dramatically and increased incidence of cryptococcosis is reported from all centers with the emergence of AIDS (Chakrabarti & Shivarakash, 2005). Infection due to Candida and Cryptococcus are the most common. These situations necessitate search for novel and more potent antifungal drugs. Although nature of the antifungal compounds produced by the bacteria reported here as well as their mode of actions have not been worked out. Further work on these compounds may throw light on their therapeutic usefulness. It is pertinent here to stress that these antifungal bacteria have been isolated from local environment and their therapeutic or other antimycotic potential may prove more useful as compared to the drugs/ a