A double-layer agar method was developed for screening microorganisms producing protease inhibitors. After colonies were grown on skim-milk agar, an agar containing sterile protease was poured onto the bottom layer. After incubation the skim-milk agar turned transparent except around colonies producing protease inhibitors. The frequency of such organisms in samples of soil, manure, and hay was studied. 27 of more than 10 000 colonies showed a significant protease-inhibiting capacity. One organism with a high trypsin-inhibiting capacity was identified as Streptomyces violascens (Preobrazhenskaya and Sveshnikova) Pridham et al. and selected for further studies.