Melanoidin decolorization/degradation has not so far been attempted with cyanobacteria. In this study, we report the ability of a marine filamentous, non-heterocystous form Oscillatoria boryana BDU 92181 to use the recalcitrant biopolymer melanoidin as nitrogen and carbon source leading to decolorization. Indirect evidence through the study of nitrogen assimilating enzymes as well as direct evidence of using C-14 radiolabeled synthetic melanoidin confirm this ability. The organism decolorized pure melanoidin pigment (0.1% W/V) by about 75% and crude pigment in the distillery effluent (5% V/V)by about 60% in 30 days. The mechanism of color removal is postulated to be due to the production of hydrogen peroxide, hydroxyl anions and molecular oxygen, released by the cyanobacterium during photosynthesis. This study for the first time, has opened up the possibility of treating distillery effluent in a cost effective way using the marine cyanobacterium.