The effects of mycelial morphology and oxygen supply on the production of the anti-tumor polysaccharide from Schizophyllum commune were evaluated in this study. A pellet size controlling bioreactor has been used successfully for the production of the anti-tumor polysaccharide of S commune. The average pellet size of mycelia in a bubble column bioreactor was around 20.5 mm in a typical run without using pellet size control. By forcing the fermentation broth through a pellet size control device with a stainless screen at five different fermentation times ranging from 1.0 to 4.5 days in each batch, different fungal pellet sizes ranging from 12.3 to 3.0 mm were achieved. The formation of anti-tumor polysaccharide, schizophyllan (SPG), was significantly associated with the pellet morphology and oxygen supply rate. An optimal product yield of 0.29 g g-1 glucose was obtained when the pellet size was controlled at 12.3 mm. Oxygen transfer limitation inside the pellets was responsible for the formation of entrapped polysaccharide. Maximum entrapped SPG yield (Yp/s entrapped) of 0.88 g g-1 glucose occurred at the optimal pellet size of 12.3 mm.