The diazotrophic cyanobacteria are cosmopolitan microbes contributing significantly to nitrogen economy of the biosphere. Many cyanobacteria are useful to mankind as food and feed for animals since they are not pathogenic and have high nutrient value [6]. Cyanobacteria are main constituents of water bloom in water resources such as lakes, ponds and dams. The occurrence of water bloom leads to deterioration of water quality because some cyanobacteria release toxic compounds and dead cells causes an objectionable odour. However, cyanobacteria are rich source of nitrogen, sugars, lipids and proteins, can be exploited for the production of useful compounds [7]. Therefore, an attempt was made to examine the possibility of utilizing cyanobacterial biomass (CB) from water bloom as a nitrogen supplement to raw carbon source (groundnut shell) for production of laccase by Coriolus versicolor MTCC138.