Cyanobacteria are well defined, most abundant and diverse group of Prokaryotes. These inhabit in all the water bodies and have the ability to grow in different environments and soil with little moisture and light. The unique feature of these organisms is to fix atmospheric nitrogen. The role of cyanobacteria in soil improvement is due to their nitrogen fixing capability. A high population of nitrogen fixing cyanobacteria was found in agricultural area where rice cultivation was practiced, rather than in other sites such as the mountain and uncultivated areas. This property of cyanobacteria is economically very important. So Inoculation and algalization method of cyanobacteria is practiced efficiently to increase cyanobacterial nitrogen fixation and is a low cost technology with cost benefit ratio and more favorable than that of many green manures. Several species of cyanobacteria grow in abundant quantities, such growths are called water blooms and in some cases, these are causedby a single species. They are capable of producing severely toxic chemicals potentially resulting in deleterious health effects on livestock. The cyanobacteria contain different biochemical compounds.