A total of fifteen yeast strains were isolated from natural sources including fruits, soil, molasses, honey and a variety of indigeneous fermented foods. Screening of these strains for growth, ethanol production and glucoamylase activity led to selection of a yeast strain SM-10 identified as S. diastaticus having maximum glucoamylase activity (80 units ml(-1)) and ethanol production from starch (3.5%). Ethanol production from wheat flour was found to be 1.75% which could be increased to 5.2% after treatment of wheat flour with pepsin, diastase and glucoamylase.