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Streptomyces species are amongst the most exploited microorganisms due to their ability to produce a plethora of secondary metabolites with bioactive potential, including several well known drugs. They are endowed with immense unexplored potential and substantial efforts are required for their isolation as well as characterization for their bioactive potential. Unexplored niches and extreme environments are host to diverse microbial species. In this study, we report Streptomyces lavendulae ACR-DA1, isolated from extreme cold deserts of the North Western Himalayas, which produces a macrolactone antibiotic, valinomycin. Valinomycin is a K+ ionophoric non-ribosomal cyclodepsipeptide with a broad range of bioactivities including antibacterial, antifungal, antiviral and cytotoxic/anticancer activities. Production of valinomycin by the strain S. lavendulae ACR-DA1 was studied under different fermentation conditions like fermentation medium, temperature and addition of biosynthetic precursors. Synthetic medium at 10 degrees C in the presence of precursors i.e. valine and pyruvate showed enhanced valinomycin production. In order to assess the impact of various elicitors, expression of the two genes viz. vlm1 and vlm2 that encode components of heterodimeric valinomycin synthetase, was analyzed using RT-PCR and correlated with quantity of valinomycin using LC-MS/MS. Annelid, bacterial and yeast elicitors increased valinomycin production whereas addition of fungal and plant elicitors down regulated the biosynthetic genes and reduced valinomycin production. This study is also the first report of valinomycin biosynthesis by Streptomyces lavendulae.