Lactic acid bacteria were isolated from fermented vegetables, sour dough, milk products, sheep and human excreta. The newly isolated cultures were evaluated for a number of probiotic characteristics like bile salt resistance, salt tolerance in general, survival in low pH, hydrophobicity of the cell surface, resistance to low phenol concentration, antimicrobial activity and susceptibility pattern against vancomycin and erythromycin. The selected cultures were further screened for their ability to produce the nutraceticals such as folic acid and exopolysaccharide (EPS). Two potent isolates, CB2 (from cabbage) and SD2 (from sour dough) were found to produce both extracellular and intracellular folate. One of the isolates from yogurt (MC-1) and the one from whey (W3) produced significant amount of EPS with a maximum production of 8.79 +/- 0.05 g/l by MC-1.