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Laccase is copper containing polyphenol oxidase that acts on wide range of substrates. It is also known as “Green Catalysts” or “Ecofriendly” enzymes. Laccase has many potential applications including textile dye decolourization, delignification of pulp and effluent detoxification. In the present study, the cyanobacterial strains were screened for laccase production and dye decolorization potential of crude laccase were investigated. Among all selected strains Lyngbya NCCU-102 showed activity (34 mU/ml), Synechocystis NCCU-370 stood at second position (31 mU/ml). Maximum laccase production was found on 7th day. Laccase activity of studied strains ranged from was 24.9 to 34 mU/ml. In all strains under normal condition cyanobacteria showed low laccase activity but in addition of inducer (guaiacol) it was amplified multiple time (60%-80%). Though, under normal condition highest laccase activity was exhibited by Synechocystis NCCU-370 but highest laccase activity induction was shown by Lygbya NCCU-102. The crude laccase of Lyngbya and Synechocystis revealed a promising result on the decolorization of synthetic dyes. About 74.1% of reactive blue 4 were effectively decolorized by Synechocystis and 59.45% by Lyngbya within 144 hr of incubation. This is first report of freshwater cyanobacteria for the laccase production and its decolorization ability and this will provide a possible way to solve environmental problems.