BACKGROUND: Poly(3-hydroxybutyrate-co-3-hydroxyvalerate) [P(3HB-co-3HV)] co-polymer has immense potential in the field of environmental and biomedical sciences as biodegradable and biocompatible material. The present study examines a filamentous N2-fixing cyanobacterium, Nostoc muscorum Agardh as a potent feedstock for P(3HB-co-3HV) co-polymer production and characterization of co-polymer film for commercial applications. RESULTS: Under photoautotrophic growth conditions, N. muscorum Agardh accumulated the homopolymer of poly-hydroxybutyrate (PHB), whereas synthesis of P(3HB-co-3HV) co-polymer was detected under propionate-and valeratesupplemented conditions. Exogenous carbons such as acetate, fructose and glucose supplementation with propionate/valerate was found highly stimulatory for the co-polymer accumulation; the content reached 58-60% of dry cell weight (dcw) under P-/N-deficiencies with 0.4% acetate + 0.4% valerate supplementation, the highest value reported so far for P(3HB-co-3HV) co-polymer-producing cyanobacterial species. The material properties of the films were studied by mechanical tests, surface analysis and differential scanning calorimetry (DSC). CONCLUSION: N. muscorum Agardh, a photoautotrophic N2-fixing cyanobacterium, emerged as a potent host for production of P(3HB-co-3HV) co-polymer with polymer content 60% of dry cell weight. The material properties of the films were found to be comparable with that of the commercial polymer, thus advocating its potential applications in various fields. (C) 2012 Society of Chemical Industry