Two Alcaligenes spp. (A1 and A2) were isolated from acidic soil (pH 4 to 4.5) of the battery factory in Mandalay Industrial Zone. These two bacteria showed antifungal activity against three common plant pathogenic fungi (Fusarium oxysporum, Rhizoctonia solani and Pythium sp.). Peptone based nutrient medium was used for culturing these two Alcaligenes spp. and it will not be suitable for large scale production in industry because of its high cost. So, two raw substrates such as groundnut meal cake and soy bean meal were used to study in the substitution of the peptone. According to the resulting data, the antifungal activities of two Alcaligenes spp. culturing in groundnut can compare with the activities in peptone although the activities in soy meal was not as good as that in peptone. So, the commercial production of biofungicide from Alcaligenes spp. can be considered by using substituted groundnut raw substrate.