Decrease in lichen diversity is an important biometric tool to assess the prevailing environmental condition in an area. An attempt has been made to explore the utility of lichen diversity in the monitoring of air pollution in the city of Pauri and Srinagar, Garhwal Himalayas, Uttaranchal. Eighty five lichen species were recorded from Pauri and Srinagar (Garhwal) in June 2005. It was observed that polluted sites had very low lichen diversity, mostly dominated by members of lichen family Physciaceae. Kiyonkaleshwar area is the site with maximum lichen diversity (46 lichen taxa) located in a more or less pollution-free area of Pauri city. Two-dimensional principal components analysis plot revealed significant positive contribution of natural (unaltered) sites towards lichen biodiversity, thus affirming the utility of lichen diversity in biomonitoring studies in a wide geographical area.