An investigation was undertaken to optimize the physiological conditions and characterize the bioactive compound responsible for fungicidal activity in Anabaena laxa. Fungicidal activity against Pythium debaryanum in the A. taxa cultures increased, when grown under continuous light (CL) at the stationary phase (28 d), with further enhancement on doubling phosphorus levels and high pH (9.0) in the growth medium. Preparatory thin layer chromatography analyses revealed the peptide nature of the fungicidal metabolite, with highest activity in a spot with R-f 0.13. The bioactive fraction (in terms of fungicidal activity) was isolated and identified using HPLC with a retention time of 14.7. Fourier transform infrared (FT-IR) spectrum of the purified bioactive fraction indicated the cyclic peptide nature of the antifungal compound. The structural elucidation using H-1, and C-13 NMR analyses revealed the same number and type of carbons as present in previously reported majusculamide C from Lyngbya majuscula. GC-MS indicated a similar major mass ion fragment spectra, with peaks as previously obtained from majusculamide C. This represents a first report on biosynthesis of a fungicidal compound in A. laxa, with structural similarities to majusculamide C. (C) 2013 Elsevier Ltd. All rights reserved.