Background: Colorants derived from natural sources look set to overtake synthetic colorants in market value as manufacturers continue to meet the rising demand for clean label ingredients-particularly in food applications. Many ascomycetous fungi naturally synthesize and secrete pigments and thus provide readily available additional and/or alternative sources of natural colorants that are independent of agro-climatic conditions. With an appropriately selected fungus; using in particular chemotaxonomy as a guide, the fungal natural colorants could be produced in high yields by using the optimized cultivation technology. This approach could secure efficient production of pigments avoiding use of genetic manipulation. Results: Polyketide pigment producing ascomycetous fungi were evaluated for their potential as production organisms based on a priori knowledge on species-specific pigment and potential mycotoxin production and BioSafety level (BSL) classification. Based on taxonomic knowledge, we pre-selected ascomycetous fungi belonging to Penicillium subgenus Biverticillium that produced yellow, orange or red pigments while deselecting Penicillium marneffei; a well known human pathogen in addition to other mycotoxigenic fungi belonging to the same group. We identified 10 strains belonging to 4 species; viz. P. purpurogenum, P. aculeatum, P. funiculosum, and P. pinophilum as potential pigment producers that produced Monascus-like pigments but no known mycotoxins. The selection/deselection protocol was illustrated in the pigment extracts of P. aculeatum IBT 14259 and P. crateriforme IBT 5015 analysed by HPLC-DAD-MS. In addition, extracellular pigment producing ability of some of the potential pigment producers was evaluated in liquid media with a solid support and N-glutarylmonascorubramine was discovered in the partially purified pigment extract of P. purpurogenum IBT 11181 and IBT 3645. Conclusion: The present work brought out that the use of chemotaxonomic tools and a priori knowledge of fungal extrolites is a rational approach towards selection of fungal polyketide pigment producers considering the enormous chemical diversity and biodiversity of ascomycetous fungi. This rationale could be very handy for the selection of potentially safe fungal cell factories not only for polyketide pigments but also for the other industrially important polyketides; the molecular and genetic basis for the biosynthesis of which has not yet been examined in detail. In addition, 4 out of the 10 chemotaxonomically selected promising Penicillium strains were shown to produce extracellular pigments in the liquid media using a solid support indicating future cell factory possibilities for polyketide natural food colorants.