Poly (3-hydroxybutyrate) [P(3HB)] is a homopolymer of 3-hydroxy butyrate and is the most widespread and best characterized member of the polyhydroxy-alkanoates (PHAs). Eventhough, P(3HB) has been recognized as a good candidate for biodegradable plastics, their high price compared with conventional plastics has limited their use in a wide range of applications. Azotobacter vinelandii (MTCC 124*) was used for the studies because it is able to utilize sucrose, which suggests a cheap carbon source such as cheese whey. The cost of carbon substrate significantly affected the overall economics in large scale production. In order to reduce the cost of production, waste whey from cheese making industry is used as a substrate. The effect of different nitrogen sources on the production of P(3HB) was studied. Bacterial peptone gives the maximum production of 1.44 g P(3HB)L-1 with an incubation time of 48 h. The other effects such as substrate concentration, inoculum size and the environmental condition such as pH are also studied. It was observed that by increasing the inoculum size the time of incubation can be reduced considerably. Productivity of 0.03 g L-1 h(-1) was obtained while a maximum productivity of 0.008 g L-1 h(-1) has been reported by using 1% cheese whey(1). Leudeking-Piret kinetic parameters are determined. The result shows that P(3HB) production kinetics may be non-growth associated.