Culture medium for keratinase production from hair substrate by a new Bacillus subtilis strain, KD-N2, was optimized. Effects of culture conditions on keratinase production were tested, and optimal results were obtained with 10% inocula (v/v), 16 g/L hair substrate, an initial pH value of 6.5 and a culture volume of 20 mL. Several carbon sources (sucrose, cornflour) and nitrogen sources (yeast extract, tryptone and peptone) had positive effects on keratinase production, with sucrose giving optimal results. To improve keratinase yield, statistically based experimental designs were applied to optimize the culture medium. Fractional factorial design (FFD) experiments showed that MgSO4 and K2HPO4 were the most significant factors affecting keratinase production. Further central composite design (CCD) experiments indicated that the optimal MgSO4 and K2HPO4 concentrations were 0.91 and 2.38 g/L, respectively. Using an optimized fermentation medium (g/L: NaCl 1.0, CaCl2 0.05, KH2PO4 0.7, sucrose 3, MgSO4 0.91, K2HPO4 2.38), keratinase activity increased to 125 U/mL, an approximate 1.7-fold increase over the previous activity (75 U/mL). Human hair was degraded during the submerged cultivation.