Biological pigments or biochromes are substances produced by living organisms and have a color resulting from selective color absorption. A total of 37 isolates of Actinomycetes and 2 bacteria were isolated from 26 different soil samples collected from different habitats of Kerala. The isolates were screened for pigment production. The effect of pigment production by the strains on various carbon and nitrogen sources were analyzed. The test microorganisms gave maximum pigmentation on glycerol as carbon source and histidine as nitrogen source when they were taken in an optimum concentration of 1:1. For the extraction of microbial pigment, both the organisms were grown on cotton saturated basal medium. The use of these pigments as colouring agents for textile fabrics were demonstrated. Out of the seven different cloth materials (silk, jute, synthetic fiber, satin, shiffon, cotton and polyester) used, silk, jute and synthetic fiber had uptake of the colour of the pigment. Key words: Actinomycetes, pigments, glycerol, histidine, cotton.