A large number of methanol-utilizing bacteria were screened for extracellular production of pyrroloquinoline quinone (PQQ) by using methanol as the carbon and energy sources. Of the bacteria selected, Hyphomicrobium sp. strain TK 0441 was examined for PQQ production by using a jar fermentor. The amount of PQQ in the broth and the level of methanol dehydrogenase activity in the cells were increased by simply decreasing the amount of Fe added to the medium. On the other hand, extracellularly produced protein which interfered with the purification of PQQ was decreased by simply increasing the amount of Mg added to the medium. A suitable medium that contained 1 mug of Fe per ml, 150 mug of Mg per ml, and trace elements was developed. In this medium, the production of PQQ reached approximately 1 mg/ml and protein formation was low.