Objective:To isolate,evaluate and characterize potential antibiotic producing actinomycetes from water and sediments of Lake Tana,Ethiopia.Methods:A total of 31 strains of actinomycetes were isolated and tested against Gram positive and Gram negative bacterial strains by primary screening.In the primary screening.11 promising isolates were identified and subjected to solid state and submerged state fermentation methods to produce crude extracts.The fermented biomass was extracted by organic solvent extraction method and tested against bacterial strains by disc and agar well diffusion methods.The isolates were characterized by using morphological,physiological and biochemical methods.Results:The result obtained from agar well diffusion method was belter than disc diffusion method.The crude extract showed higher inhibition zone against Gram positive bacteria than Cram negative bacteria.One-way analysis of variance confirmed most of the crude extracts were statistically significant at 95%confidence interval.The minimum inhibitor)concentration and minimum bactericidal concentration of crude extracts were 1.65 mg/mL and 3.30 mg/mL against Staphylococcus aureus,and 1.84 mg/mL and 3.80 mg/mL against Escherichia coli respectively.The growth of aerial and substrate mycelium varied in different culture media used.Most of the isolates were able to hydrolysis starch and urea:able to survive at 5%concentration of sodium chloride:optimum temperature for their growth was 30°C.Conclusions:The results of the present study revealed that freshwater actinomycetes of Luke Tana appear to have immense potential as a source ol antibacterial compounds. Objective: To isolate, evaluate and characterize potential antibiotic producing actinomycetes from water and sediments of Lake Tana, Ethiopia. Methods: A total of 31 strains of actinomycetes were isolated and tested against Gram positive and Gram negative bacterial strains by primary screening. In the primary screening.11 promising isolates were identified and subjected to solid state and submerged state fermentation methods to produce crude extracts.The fermented biomass was extracted by organic solvent extraction method and tested against bacterial strains by disc and agar well diffusion methods. isolates were characterized by using morphological, physiological and biochemical methods. Results: The result obtained from agar well diffusion method was belter than disc diffusion method. crude extract showed higher inhibition zone against Gram positive bacteria than Cram negative bacteria. One-way analysis of variance most most of the crude extracts were highly significant at 95% confidence interval. The minimum inhibitor) concentration and minimum bactericidal concentration of crude extracts were 1.65 mg / mL and 3.30 mg / mL against Staphylococcus aureus, and 1.84 mg / mL and 3.80 mg / mL against Escherichia coli respectively. mycelium varied in different culture media used. Host of the isolates were able to hydrolyzing starch and urea: able to survive at 5% concentration of sodium chloride: optimum temperature for their growth was 30 ° C. Conlusions: The results of the present study revealed that freshwater actinomycetes of Luke Tana appear to have immense potential as a source ol antibacterial compounds.