Out of 63 bacteriologically examined sanguineous fluids samples which were collected from Oedematous Skin Disease (O.S.D.) lesions, 37 isolates of C. pseudotuberculosis (C.p.) were recovered. The sensitivity tests revealed that isolates were highly sensitive to trimethoprim + sulphamethoxazole, amoxycillin, gentamicin and enrofloxacin. Diphtheria toxin (DT) produced by C. pseudotuberculosis of buffalo was determined by using the double immunodiffusion technique, it was applied on concentrated exotoxins which was prepared from C.p. isolates against Diphtheria toxin antiserum, its results were 15 (40.54%) positive and 22 (59.46) %) negative to presence of DT. Virulence of isolates having only phospholipase D ( PLD) or both PLD and DT was assayed by S/C inoculation of exotoxines prepared from isolates in guinea pigs, 15(40.54%) guinea pigs died within 18 hours while 22 (59.46%) guinea pigs died during 48 hours. An important point in this investigation that there have been very rare previous reports describing the production of DT by local isolates of C. pseudotuberculosis of buffalo.