Xanthan gum is one of the polysaccharides most commonly used in a broad range of industries (food, cosmetics, pharmaceutical, etc.). Agro-industrial by-products are being explored as alternative low-cost nutrients to produce xanthan gum by Xanthomonas campestris. In this study, for the production of xanthan gum, sugar beet molasses and chicken feather peptone (CFP) were used as carbon and nitrogen sources, respectively. X. campestris produced the highest level of xanthan gum (20.5 g/L) at 60 h of cultivation using sugar beet molasses (40 g/L total sugar) supplemented with CFP (4 g/L) at pH 7, 200 rpm, and 30 °C. The pyruvic acid content of the xanthan gums increased with increasing CFP concentration. Compared with commercial organic nitrogen sources (tryptone, bacto peptone, and yeast extract), the highest production of xanthan gum was obtained with CFP. Moreover, among the tested peptones, the highest pyruvic acid (3.2%, w/w) content was obtained from CFP. The usage of sugar beet molasses and CFP as substrates in industries would enable a cost-efficient commercial production. These results suggest that sugar beet molasses and CFP can be used as available low-cost substrates for xanthan gum production by X. campestris.