Increased utilization of synthetic plastics caused severe environmental pollution due to their non-biodegradable nature. In the search for environmentally friendly materials to substitute for conventional plastics, different biodegradable plastics have been developed by microbial fermentations. However, limitations of these materials still exist due to high cost. This study aims at minimization of cost for the production of biodegradable plastics P(3HB) and minimization of environmental pollution. The waste biological sludge generated at wastewater treatment plants is used for the production of P(3HB) and wastewater is used as carbon source. Activated sludge was induced by controlling the carbon: nitrogen ratio to accumulate storage polymer. Initially polymer accumulation was studied by using different carbon and nitrogen sources. Maximum accumulation of polymer was observed with carbon source acetic acid and diammonium hydrogen phosphate (DAHP) as nitrogen source. Further studies were carried out to optimize the carbon: nitrogen ratios using acetic acid and DAHP. A maximum of 65.84% (w/w) P(3HB) production was obtained at C/N ratio of 50 within 96 hours of incubation.