The main goal of this study was to provide possible alternative production medium containing xylose enriched spent lemongrass hydrolysate with glycerol as a feedstock and corn gluten meal as a nitrogen source for their ability to support the cell growth of the Streptomyces clavuligerus MTCC 1142 for the production of clavulanic acid. The xylose was extracted from spent lemongrass by using 0.25% dilute nitric acid and further partial purification of acid spent hydrolysate was performed using ion exchange resin. The method was optimized using xylose enriched hydrolysate as feed stock combined with glycerol at ratio 1:1 and growing the selected strain aerobically in media at neutral pH containing 5 mM phosphate ion concentration and using corn gluten meal as a nitrogen source, fermenting at a temperature of 28–30 °C for 96 h and 0.59 g/L clavulanic acid was effectively produced. These results demonstrate the feasibility of using spent lemongrass as feedstock for the cultivation of S. clavuligerus to produce clavulanic acid.