Oscillatoria sp. growing as epiphyte on the thallii of Gracilaria edulis was known to contain enzymes endowed with agarolytic properties. The alkaline PO, buffer (0.1 ml, pH 7.5) extracts containing protein concentration of 600 pg/ml exhibited maximum activity of agar solublization (490 pg) on 1% agar slants within the first three hours. However, at pH 6.0 the enzyme extract exhibited low rate of agarolytic activity. The in vim activity of this extract was also studied on the bits of fresh thallus of G. edulis for cell seperation. The results are discussed in the light of possibilities of applying this cost effective marine source of enzyme on protoplast isolation and somatic hybridization of Indian agarophytes.