The present study reports siderophores production from bacteria isolated from Iron factory soil and its antifungal activity. Of the twelve morphologically different bacterial cultures isolated from iron factory soil, Kanchipuram, only two strains SD6 and SD12 showed siderophores production in Chrome Azurol S assay. Strain SD12 which showed maximum siderophores production, was selected for further studies. Siderophores produced by the strain SD12 was identified as hydroxymate type. Partial purification was carriedout by ammonium sulphate precipitation and dialysis. The molecular weight of partially purified siderophores was found to be 80KDa and it showed good antifungal activity against Fusarium solani, Aspergillus niger and Phythium sp. The potential strain was identified as Bacillus sp SD12 based on their phenotypic characteristics. Further purification and characterization of siderophores from strain SD12 pave the way for its utilization in the field of medicine and agriculture.