Indiscriminate use of antibiotics has led to the emergence of antibiotic resistant microbes and the loss of natural flora in aquaculture systems ultimately necessitating the ban of many of the chemotherapeutants in aquaculture. Actinobacteria play a profound role in the biogeochemical cycling in the marine environment and they represent the principal source of secondary metabolites with antimicrobial property. In the present study, 98 marine derived actinomycete isolates were screened for antimicrobial activity against the common aquatic pathogens. A potent actinomycete isolate S26, identified as Streptomyces variabilis based on 16S rRNA gene sequencing was used for further study. Optimization of the fermentation medium for secondary metabolite production was carried out by response surface methodology (RSM) using DESIGN EXPERT. The ANOVA of the quadratic regression model demonstrated that the model was highly significant for the response concerned i.e., antimicrobial activity as evident from the Fisher’s F- test with a very low probability value [(P model>F) = 0.0001]. Of the 10 different solutions suggested by the software, the most suitable composition was found to be starch, 1.38 %; soy powder, 0.88 %; ammonium sulphate, 0.16 % and salinity, 27.76 ‰. S. variabilis S26 cultured in the optimized production medium was applied in the Penaeus monodon larval rearing system and the total Vibrio count and survival rate were estimated. S. variabilis S26 treatment showed a significant reduction in Vibrios and better survival in the Penaeus monodon culture system compared to the control.