Polyhydroxybutyrates are the biopolymers and have a potential to be used as biodegradable plastics to replace synthetic plastics. The present investigation has been undertaken to isolate polyhydroxybutyrate producing bacteria and analyze the diversity among them related with sequence of PHB synthase gene. The soil and water sample for isolation of bacteria were collected from fourteen diverse sources. Out of hundred bacterial isolates forty were found PHB producing after initial fluorescence based screening on Nile blue A containing medium. By trying different combinations of carbon and nitrogen sources 2g glucose as carbon source and 0.65g potassium nitrate was found as most suitable. Six best PHB accumulating strains were selected and characterized for optimization of PHB production media. The selected strains were producing 59-29% PHB of dry weight of cell pellet. Different combinations of Agri-byproducts were tried as carbon source for cost effective PHB production and 3g molasses was found as best carbon source for PHB production (60% of cell dry weight).PCR amplification was performed by PHB synthase gene specific primers with genomic DNA of selected strains.