Abstract: Soil pollution by elevated heavy metals are known to adversely effect microbial activities and their functional diversity. However, response of certain beneficial native soil bacterial population to heavy metals is poorly understood. In the present study, effect of cadmium (Cd2+) on abundance and diversity of free living nitrogen fixing Azotobacter spp. has been investigated by short term microcosm experiment. After 45 days, total viable counts of both heterotrophic and Azotobacter spp. have been decreased with increased Cd2+ concentrations. Significant negative correlation (R = -0.99, p = 0.006) was observed between abundance of Azotobacter spp. and Cd2+ concentration. Similar kind of result has been noticed with total viable heterotrophic bacteria. Amplified ribosomal DNA restriction analysis (ARDRA) based dendrogram revealed the Cd2+ induced diversity shift of Azotobacter population. Relatively decreased diversity of Azotobacter spp. was noticed at elevated concentration of Cd2+ (5 mg kg-1 soil). Reduction of both abundance and diversity of Azotobacter spp. pointed apparent deleterious effect of Cd2+ on free living nitrogen fixation and concurrent soil health.