Microbes producing L-asparaginase are usually screened on plates containing L-asparagine and phenol red. The contrast of the colored zone formed by microorganisms varies from yellow and pink in this method and we cannot differentiate between L-asparaginase producers and non-producers. Later an improved method was developed for screening of extracellular L-asparaginase producing microbes with bromothymol blue as pH indicator instead of phenol red. The reported results were not very sharp for the isolates producing extracellular L-asparaginase as they produce dark blue colored zones at alkaline pH. The present method is novel, more sensitive, simple and rapid than the existing methods for screening of both bacteria and fungi producing L-asparaginase extracellularly. Nutrient asparagine agar and potato dextrose asparagine agar media stained with Gram s iodine solution were used for detection of extracellular L-asparaginase producing bacteria and fungi respectively. Plate detection assay with Gram s iodine exhibited clear zones around the colonies producing L-asparaginase. The present method is more accurate for screening of potent isolates based on the diameter of hydrolyzed zones formed. The reported method can be utilized to identify the prominent isolates producing L-asparaginase.