There are a great interest in replacing synthetic pigments with another healthier which obtained from natural sources, especially microbial pigments. In this study Penicillium sp.was isolated from soil sample and noticed its capability to produce red pigment on potato dextrose agar plates. The factors affecting pigment production in submerged culture were studied to determine the best conditions using potato dextrose broth as a basal medium. Mannitol was found to be the best carbon source which folded the production about 5 times comparing with dextrose. Nitrogen sources reduced pigment production although they increase growth yield. Biomass and red pigment production were found to be not directly associated. The highest production of red pigment (21.08 OD₄₉₀) by Penicillium Sp. was obtained at 24° C, pH 6.5 with 1% (w/v) mannitol as a carbon source inoculated with 1 ml of 10⁶ spore/ml after 6 days of incubation.