Vinasse, a highly polluting waste of the ethanol industry was utilized for the production of polyhydroxyalkanoate (PHA) by the extremely halophilic archaeon, Haloferax mediterranei in shake-flasks. Following pre-treatment through adsorption on activated carbon, 25%-50% (v/v) pre-treated vinasse was utilized leading to 70% maximum accumulation of PHA. Maximum PHA concentration of 19.7 g/l, product yield coefficient (based on total carbohydrates) of 0.87 and 0.21 g/l h volumetric productivity were achieved. Concomitant lowering of BOD5 of pre-treated vinasse by at least 78% and COD by at least 80% was attained at the end of this process. The PHA was recovered by osmotic lysis of the cells and purification by sodium hypochlorite and organic solvents. Through UV-vis spectroscopy, gas chromatography, differential scanning calorimetry and nuclear magnetic resonance spectroscopy, the PHA was identified as poly-3-(hydroxybutyrate-co-hydroxyvalerate). The 3-hydroxyvalerate content was 12.36 mol % (utilizing 25% pre-treated vinasse) and 14.09 mol % (utilizing 50% pre-treated vinasse). High salt concentration in the medium allowed this process without sterile conditions and thus reduction in costs of sterilization can be envisaged. Activated charcoal pre-treatment of vinasse is economical than competing processes such as ultrafiltration of whey, extrusion and enzymatic treatment of rice and corn starch. Without impacting sugar prices, this process can easily be integrated into a distillery that has fermentation equipment and trained personnel. High PHA content, productivity, zero-cost carbon source, low-cost isolation of a high-purity product and potential integration into ethanol manufacturing unit with concomitant wastewater treatment should merit further development of this process to higher scales.