In modern life petroleum-based plastic has become indispensable due to its frequent use as an easily available and a low cost packaging and moulding material. However, its rapidly growing use is causing aquatic and terrestrial pollution. Under these circumstances, research and development for biodegradable plastic (bioplastics) is inevitable. Polyhydroxybutyrate (PHB), a type of microbial polyester that accumulates as a carbon/energy storage material in various microorganisms can be a good alternative. In this study, 23 cyanobacterial strains (15 heterocystous and 8 non-heterocystous) were screened for PHB production. The highest PHB (6.44% w/w of dry cells) was detected in Nostoc muscorum NCCU- 442 and the lowest in Spirulina platensis NCCU-S5 (0.51% w/w of dry cells), whereas no PHB was found in Cylindrospermum sp., Oscillatoria sp. and Plectonema sp. Presence of PHB granules in Nostoc muscorum NCCU- 442 was confirmed microscopically with Sudan black B and Nile red A staining. Pretreatment of biomass with methanol: acetone: water: dimethylformamide [40: 40: 18: 2 (MAD-I)] with 2 h magnetic bar stirring followed by 30 h continuous chloroform soxhlet extraction acted as optimal extraction conditions. Optimized physicochemical conditions viz. 7.5 pH, 30°C temperature, 10:14 h light:dark periods with 0.4% glucose (as additional carbon source), 1.0 gl-1 sodium chloride and phosphorus deficiency yielded 26.37% PHB on 7th day instead of 21st day. Using FTIR, 1H NMR and GC-MS, extracted polymer was identified as PHB. Thermal properties (melting temperature, decomposition temperatures etc.) of the extracted polymer were determined by TGA and DSC. Further, the polymer showed good tensile strength and young's modulus with a low extension to break ratio comparable to petrochemical plastic. Biodegradability potential tested as weight loss percentage showed efficient degradation (24.58%) of PHB within 60 days by mixed microbial culture in comparison to petrochemical plastic.