We isolated a Staphylococcus aureus strain HPC-250 producing antibacterial agent against Paenibacillus strain HPC-251. Both strains were isolated from the same environmental niche. The bacteria were identified using the partial sequencing of their TA-cloned 16S rDNA. Spectrum of the antibacterial agent was also tested against routine observed bacteria with drinking water contamination such as Escherichia coli, Salmonella, Pseudomonas, and Vibrio and these were found to be sensitive. Bacteria like Acinetobacter and Burkholderia were found to be resistant. The differential antibacterial activity of the HPC-250 was observed for the genus Bacillus where B. subtilis remained resistant although B. sphaericus was sensitive.