1-Deoxynojirimycin (DNJ) has been extensively investigated for its applications as an α-glucosidase inhibitor in postprandial hyperglycemia, and has been applied to nutraceuticals and medicines to prevent or delay the progression of type 2 diabetes. However, the amount of DNJ in mulberry leaves is low (approximately 0.1%), therefore, a more effective extraction method is needed. In this study, microbial DNJ production was developed as an alternative to chemical methods. We identified fermented sericultural products and bacteria that produce DNJ in large quantities using high performance liquid chromatography and thin layer chromatography. The inhibition of α-glucosidase activity was examined with respect to DNJ production or non-production. Crude DNJ from the isolated strains exhibited greater than 70% α-glucosidase activity. An investigation of the effect of mulberry leaf powder concentration (1~5%), using high DNJ producing bacteria, provided evidence for microbial mass production of DNJ.