Inhibitory activity of a marine pigmented bacterium - Alteromonas sp. - isolated from Penaeus monodon Fabricius larva against pathogenic and environmental isolates of Vibrio harveyi was studied. All the isolates were inhibited to varying degrees by Alteromonas sp. in vitro. The antibacterial substance produced by the Alteromonas sp. was soluble in organic solvent and closely bound to the external surface of bacterial cells. The antibacterial Alteromonas sp., when allowed to colonize on shrimp larvae, suppressed the activity of V. harveyi M3 and reduced mortality of P. monodon larvae in vivo.