Biosurfactant producing bacteria, terrestrial Bacillus subtilis SJ301 and marine Bacillus vallismortis JB201 were isolated from sites contaminated with crude oil and its by-products. Cellular growth and biosurfactant production of the isolates were studied with different carbon sources (glucose, fructose, glycerol and petrol). Both bacterial isolates synthesized biosurfactants in the presence of glucose at late log phase and in the presence of petrol at stationary phase at 35°C. Biosurfactants obtained from both bacteria reduced the surface tension of the growth medium below 33 mN/m and exhibited this capacity in cell-free filtrates also. Raising the temperature from 25 to 35°C, accelerated onset of biosurfactant production in both the isolates, however, change in pH values from 6.5 to 7.5 had no effect. Functional and structural characterization of the crude biosurfactants was carried out by FTIR and 1H and 13C NMR spectroscopy and the compounds were identified as surfactin lipopeptides. Biosurfactant produced by the terrestrial B. subtilis SJ301 showed antimicrobial activity against Escherichia coli and Shigella dysenteriae whereas the marine B. vallismortis JB201 revealed antimicrobial activity against Klebsiella pneumoniae, Salmonella typhi and Streptococcus pneumoniae.