Use of Gymnema sylvestre, commonly known as periploca of woods, an Indian medicinal woody climber has increased recently due to the pharmaceutical potential of gymnemic acids, found in its leaves. Gymnemic acids have been reported to effect a natural treatment for diabetes. This study developed a novel cell culture system for in vitro growth and production of this species, suggesting a possible technology for large scale production of gymnemic acids. Leaf explants grown in Murashige and Skoog salts supplemented with IAA 1.5mg/l and BA 0.5mg/l gave maximum percentage of callus formation compared to other treatments evaluated. The growth rate and gymnemic acid accumulation in the callus suspension culture was determined. The HR protein from Xanthomonas spp. was used as an elicitor for the production of gymnemic acid. When compared to non-elicited cultures, two fold increase of gymnemic acids yield in elicited cultures was observed. The quantification of gymnemic acid was done using HPLC. The total gynemagenin after 21st day of incubation was 30.2389mg/100ml.