Spirulina platensis, a cyanobacterium of economic important was studied for the tolerance to cadmium. The bioassay studies showed the EC50 value to be 1.53 mg/g. The cyanobacterium was very sensitive to low metal concentration and the productivity was also reduced. The chlorophyll pigments reduced with decreasing the algal biomass. The algal survival rate showed a marked reduction in their survival rate from 98% in the control medium to >50% at 1.6 mg/L cadmium and no growth in the culture exposed to cadmium concentration of 1.9 mg/L. The Biosorption studies showed that the algae had a great potential for adsorbing the heavy metal on to the cell. A maximum uptake of 44.56 mg/g was obtained in living cells of Spirulina platensis suggesting the possibility of the algae to be a good biosorbent. Culturing the algae in low metal concentrations can be utilized as potential tertiary treatment for metal containing effluent. The immobilized cell of Spirulina platensis was able to be more effective in absorbing the metal 47.89 mg/g to the cell. The results of the study indicate the potentiality of the algae to be a possible agent for removal of heavy metals from aqueous solutions.