Microbial production of metabolites is often limited by product inhibition, decomposition or bio-degradation during the process of fermentation. if the product can be removed from the broth, e.g. by liquid/liquid extraction, these losses can be reduced. The production of gibberellic acid (GA3), a secondary metabolite of the ascomycete Gibberella fujikuroi, was studied with respect to product inhibition and kinetics of decomposition under fermentation conditions. A two-fold increase in the yield of GA3 as a result of on-line extraction of the product by polyalkoxylate (Genapoi 2822) is described. For this extractive fermentation, a stirred tank fermenter was used. The biomass was separated by cross-flow filtration and recycled. The filtrate was extracted in a mixer/settler unit with the extraction solvent. The raffinate was recycled to the fermenter. The influences of product inhibition, chemical decomposition of the product and possible bio-degradation on the product yield are discussed.