The problem of filamentation of optical beam in high power laser is studied by taking into account the effect of saturating gain. A set of propagation equations for small scale modulation is derived. An exact analytic solution to the derived equation is obtained in the case of small signal gain. In the case of saturating gain, the obtained equation is solved numerically. It is found that for a given input power, the cutoff spatial frequency, the fastest growing frequency and the maximum growth rate increase in an amplifying medium, and varied with propagation distance. The saturating effect of gain lowers the growth rate of the B integral and the small scale modulation propagating in the amplifying medium.