Abstract: The present work deals with identification of a cyanobacterium found to be predominant causing blooms on the water surface in fresh water, fish ponds. The cyanobacterium blooms were found to be specially flourishing in parallel with low fish productivity. Microcystis aeruginosa was suspected to some biological studies including, the antibacterial effects of its cell free extract against Gram +ve and Gram -ve bacteria and hepatotoxic effect of the cell free extract on the liver of albino rats. Treatment with a single intraperitoneal dose (½LC50) of the extract caused elevation of alkaline phosphatase and transaminase (GOT & GPT) in the animal sera. Histological examination of the liver of treated animals revealed congestion of blood vessels and abundance of leucocytic infiltration, a matter which may be due to one or more of microcystins present in this cyanobacterium.