The selection of improved strains of Acidithiobacillus ferrooxidans with better colonization & iron(II) oxidation abilities is a crucial need for biohydrometallurgy. Here we present a method for selection of the morphological variants of Acidithiobacillus ferrooxidans in thiosulfate containing semi-solid growth medium. For selection of variants we used standard culture of Acidithiobacillus ferrooxidans NCIB 8455 strain and Acidithiobacillus ferrooxidans strain isolated from Indian acid-mine water. All the strains were identified by their growth in liquid 9k medium and characterized at molecular level by the presence of insertion sequences IS T2 and IS T445. The conservation of unique restriction sites within the two known insertion sequences of A. ferrooxidans, IS T2 and IS T445, were confirmed by observing no polymorphism in the restriction fragment lengths of the individual amplicons generated from wild type and variant strains by using specific IS T2 and IS T445 primers. The selected variants showed stable heritable characters with marked difference from those of the wild type, in their colonizing ability on reduced sulfur compounds in agar medium, colony morphology and iron oxidation capability. We demonstrated the method for selection of Hyphal colonies which had 2.6 fold and 2.08 fold higher iron oxidation capability and ability to colonize at much higher rate with altered morphology than the wild type strain of A. ferrooxidans. These variants might prove as efficient microbe for bioleaching.