A simple extrusion method was used to entrap Synechocystis sp.P2A in alginate beads. The viability, growth response and Indoleacetic acid (IAA) production at different pH were studied in alginate immobilized Synechocystis sp.P2A. 2.6% sodium alginate (w/v) and pH-7 was found to be optimum for growth of Synechocystis sp. P2A as well as IAA production (79µg/ml). To prepare effective formulation for plant inoculation, alginate beads were further modified by coating with chitosan or chitosan-polyethylene glycol. Effect of all formulations containing Synechocystis sp. P2A in free and immobilized form on growth of Triticumaestivum was evaluated. Soil inoculation of entrapped Synechocystis in alginate beads coated with chitosan resulted in 20% increase in root length and 14% increase in dry weight as compared to non-inoculated seedlings. Free and immobilized cyanobacteria were allowed to grow in BG11 medium supplemented with 100µg/ml K 2 CrO 4 and chromium reduction was measured at variable pH. At pH 7 immobilized showed 5% more reduction than free form. The current study showed that alginate immobilized Synechocystis sp. P2A can accomplish viable functions including plant growth promoting hormone production and chromium reduction and therefore propose an efficient and convenient method for storage and use of cyanobacteria.