A new species of Streptomycetes isolated from the rhizosphere soil of medicinal plants in Kolli hills of Tamil Nadu,India. The newly isolated strain Streptomyces designated as SCBT, is capable of inhibiting the growth of a wide range of Gram negative bacteria. An almost complete 16S rRNA gene sequence of the isolate was generated and compared with sequences of representative Streptomyces. The 16S rRNA data not only supported the classification of the strain in the genus Streptomyces, but also showed that strain SCBT was most closely related to S. albogriseolus ATCC AJ494865 with a sequence similarity of 99%. Despite the high sequence similarity, strain SCBT was phenotypically different from S.albogrieseolus ATCC AJ494865 and sequence was submitted to NCBI and Accession number EU143270 was obtained. Phenetic and genetic results support the classification of strain SCBT as a new species. The purified compound from the new species exhibited a wide spectrum against various Gram negative and Gram positive organisms.