Myrobalan (Terminalia chebula) is a potential raw material for the production of gallic acid. It is a rich source of tannins and contains up to 40% of total tannins as gallotannins. The present study involves the fermentation of Myrobalan used as a substrate for fermentation using arishta containing tannase producing microorganism resulting in the biotransformation of Myrobalan tannins to gallic acid which is extracted, isolated and characterized. The self-generated fermentation system, arishta was prepared by forming a decoction of Myrobalan which was allowed to ferment for one month. Then after the fermentation was complete the gallic acid was extracted and isolated by partitioning it with ethyl acetate. The gallic acid crystals obtained upon recrystallization was characterized by phytochemical screening, TLC, IR, NMR and XRD. The completion of fermentation process was confirmed when the pH of the formulation was found to be 4.28. The extract was screened for the presence of tannins, which was confirmed by the appearance of bluish black precipitate upon reaction with Ferric chloride solution. Further the structural characterization of gallic acid was confirmed by TLC, FTIR, NMR and XRD.