During screening for poly-β-hydroxybutyrate (PHB) producing bacteria from distillery effluent sample, six out of 30 isolates comprising of three strains of Alcaligenes sp., two strains of Bacillus sp., and one strain of Pseudomonas sp. were found to accumulate varying levels of intracellular PHB. Amongst the various isolates, Alcaligenes sp. RZS4 was found as the potent PHB-producing organism, accumulating higher amounts of PHB. PHB productivity was further enhanced in the presence of oxygen, nitrogen-limiting conditions, and cloning of PHB synthesizing genes of Alcaligenes sp. RZS 4 into Escherichia coli. A twofold increase in PHB yield was obtained from recombinant E. coli vis-à-vis Alcaligenes sp.; the recombinant E. coli accumulated more PHB in NDMM, produced good amount of PHB in a single-stage cultivation process under both nutrient-rich and nutrient-deficient conditions. Extraction of PHB with acetone-alcohol (1:1) was found as suitable method for optimum extraction of PHB as this mixture selectively extracted PHB without affecting the non-PHB cell mass. PHB extract from recombinant E. coli showed the presence of C-H, =O stretching, =C-H deformation, =C-H, =CH, and =C-O functional groups characteristic of PHB.