Abstract: The present studies was taken up to evaluate the ESBL production and in vitro susceptibility of Klebsiella pneumoniae and E. coli, isolates collected from Tuberculosis (II phase) patients admitted in a tertiary care center. The bacterial isolates were collected during March 2004 to December 2005. One hundred and twenty Isolates of Klebsiella pneumoniae and E. coli were collected from urine, Blood, pus, sputum, bronchial wash and aspiration fluid. Antimicrobial susceptibility was carried out by Kirby-bauer’s disc diffusion technique using NCCLS criteria. A screening of ESBL production was done by Double Disk Synergy method (DDS) and three dimensional tests. The frequency of β-lactamase activity was found in 22 (12%) isolates out of 120 strains, 12 were Klebsiella sp. and 10 E. coli demonstrated ESBL activity. The study shows alarming rise in ESBL production among Klebsiella pneumoniae and E. coli strains on high rate of resistance to a wide range of antibiotics.