Soil and water samples were collected from various regions of SIPCOT and nearby Vanappadi Lake, Ranipet, Tamilnadu, India. Based on their colony morphology and their stability during subculturing, 72 bacteria were isolated, of which 14 isolates were actinomycetes. Preliminary selection was carried out to exploit the ability of the microorganisms to utilize sodium cyanate as nitrogen source. Those organisms that were able to utilize cyanate were subjected to secondary screening viz., utilization of sodium cyanide as the nitrogen source. The oxygenolytic cleavage of cyanide is dependent on cyanide monooxygenase which obligately requires pterin cofactor for its activity. Based on this, the organisms capable of utilizing sodium cyanide were tested for the presence of pterin. Thin layer chromatography (TLC) of the cell extracts using n-butanol: 5 N glacial acetic acid (4:1) revealed that 10 out of 12 organisms that were able to utilize cyanide had the pterin-related blue fluorescent compound in the cell extract. The cell extracts of these 10 organisms were subjected to high performance thin layer chromatography (HPTLC) for further confirmation using a pterin standard. Based on the incubation period, cell biomass yield, peak height and area, strain VPW3 was selected and was identified as Bacillus subtilis. The Rf value of the cell extract was 0.73 which was consistent with the 0.74 Rf value of the pterin standard when scanned at 254 nm. The compound was extracted and purified by preparative High Performance Liquid Chromatography (HPLC). Characterization of the compound was performed by ultraviolet spectrum, fluorescence spectrum, Electrospray Ionization-Mass Spectrometry (ESI-MS), and Nuclear Magnetic Resonance spectroscopy (NMR). The compound is proposed to be 6-propionyl pterin (2-amino-6-propionyl-3H-pteridin-4-one).