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The processes of biodegradation have widely used to remove hazardous material from aquatic and soil system is an environmental friendly tool. The present study was conducted to investigate the decolorization and biodegradation of some dyes using some microalgal species isolated from pollutant industrial regions. Two microalgal species (cyanobacteria) were isolated and were identified as Pseudo anabaena sp. and Microcystis aeruginosa. The ability of the two algae to remove and decolorize Disp.orange 2RL, reactive yellow 3RN, Reactive black NN and Tracid red BS were investigated. The results revealed that the removal of these dyes depends on the algal species, its growth rate and the structure of dyes. The maximum decolorization was observed in Reactive black NN and Disp.orange 2RL by M. aeruginosa 55.12 % and 65.07 %, respectively after 7 days incubation. Also Pseudo anabaena sp. decolorized Reactive yellow 3RN and Tracid red BS by 58.47 % and 78.44%, respectively. Azo reductase enzyme of algae which responsible for degradation of azo dyes into aromatic amine by cleavage the azo linkage was estimated. The results showed that treatment of M. aeruginosa with Disp.orange 2RL induced the azo reductase enzyme by 68.04% and Pseudo anabaena sp. with Reactive yellow 3RN by 55.64 % after 7 days of incubation. The degradation product after decolorization was examined by spectroscopic analysis and Fourier transformed infrared spectroscopy analysis.