This paper describes the production of red pigment by Monascus purpureus CMU001 in submerged fermentation system using residual beer as an inexpensive substrate. Alcohol and CO2 removed residual beer supplemented with 7.5 g/l of monosodium glutamate was used as the fermentation medium. Shaking speed and medium volume was found to affect red pigment synthesis by M.purpureus. Maximum red pigment production of 18.54 UA(510nm) was obtained with 200 rpm shaking speed, 50 ml of the fermentation medium, initial pH of 7.0, inoculation ratio of 2% (v/v). Several nitrogen sources were screened, and the highest pigment synthesis was obtained with monosodium glutamate. Promising results were obtained with corn steep liquor and yeast extract when used as the nitrogen source in pigment production. The optimum monosodium glutamate concentration was found to be 7.5 g/L. Kinetics of pigment and biomass formation was determined under the optimized fermentation conditions over a fermentation period of 8 days. This is the first article that evaluates residual beer for pigment synthesis using M.purpureus in the submerged fermentation system.