The incidence of dermatomycoses has risen dramatically all over the world. Athlete’s foot is common and difficult to treat and if untreated, may lead to bacterial infection of the lower leg skin (cellulites). These fungus diseases are clinically termed as the Tineas or Dermatomycoses. Ringworm infections of skin are most prominent and remain a common clinical problem despite the availability of several antimycotic drugs. These synthetic agents are non biodegradable and cause adhesive effects and residual toxicity. Therefore, keeping this fact in mind, the study have been carried out to isolate novel antifungal antibiotic producing bacteria. In the course of screening programme, a Bacillus subtilis MTCC-8114 was isolated, which showed activity against Microsporum fulvum & Trichophyton mentagrophytes. The antibiotic was characterized as peptide antifungal antibiotic and also found stable at different physiological conditions (temperature, pH, incubation period, aeration & non-aeration). The biotechnological potential of B. subtilis is noteworthy and may be used as biological control agent against pathogenic fungi or as food additive.