A total of eight isolates belonging to the genus Pseudomonas were isolated from environmental samples and were screened for pyocyanin production. Isolate U4 was selected as highest pyocyanin producer. Pyocyanin was extracted by using chloroform solvent system. Pigment production began during the first 24 hrs of growth and maximal bioactive pigment yield was achieved at 13.65μg/ml after 72 hrs. Neutral pH at 30◦ C showed the optimum conditions for maximum pyocyanin production (17.56μg/ml). Maximum pyocyanin production was obtained using mannitol as carbon source (23.32μg/ml) and peptone as nitrogen source (26.12μg/ml). The antibacterial activity of pyocyanin was determined by well diffusion method against gram negative and gram positive bacteria.