Streptomyces fradiae was cultivated in both an air-lift bioreactor and a jar-fermentor with various agitation rates from 200 to 800 rpm to investigate differences in neomycin production between the two reactors. Final neomycin concentrations in the jar-fermentor operated at 600 rpm and the air-lift bioreactor were 3.19 and 1.39 g/l, respectively. On the other hand, levels of soybean oil consumption in the two reactors were 25.9 and 9.4 g/l, respectively. Shear stress due to mechanical agitation caused changes in the morphology of mycelia and influenced neomycin production. The morphological changes of the mycelia in the jar-fermentor caused the viscosity of the culture broth to decrease by half, and soybean oil consumption and fatty acid uptake rate to increase 3- and 1.8-fold, respectively, in comparison with those of the air-lift bioreactor. The product yield coefficient determined from the level of soybean oil consumption in the air-lift bioreactor was similar to that of the jar-fermentor at 600 rpm, but the neomycin yield was less than one-half. In the case of the jar-fermentor, the yield increased with increasing agitation rate and was maximum at 600 rpm. To maximize neomycin production in S. fradiae cultures using soybean oil as sole carbon source, it was necessary to provide a degree of shear stress to the mycelia and to optimize liquid mixing. In an air-lift bioreactor, the soybean oil consumption may be suppressed due to a low degree of liquid mixing.