Background and Objective: Petroleum hydrocarbons are a bunch of pollutants hazardous to the environment. Nowadays, biodegradation of petroleum contaminants is considered as one of the most efficient and most cost effective methods of removing oil contamination from the environment. The main objective of this study is to investigate the potential of cyanobacterium Schizothrix vaginata ISC108 in the biodegradation of crude oil and to evaluate oil effects on growth rates, dry weight, and chlorophyll content. Material and Methods: In this experimental study, the cyanobacterium Schizothrix vaginata ISC108 was obtained from the algal culture collection of Research Institute of Applied Science, ACECR, Tehran, Iran. First, purification of the cyanobacterium was performed using agar plate method on solid medium of BG11. Growth rate, chlorophyll content and dry weight of cyanobacteriaum was measured using spectrophotometry method. The biodegradation rate of crude oil was calculated using gas chromatography (GC) analysis. Results: Measuring the growth rate of cyanobacterium Schizothrix vaginata at 1% treatment of crude oil and control samples showed that the growth of cyanobacterium in the presence of crude oil as the sole carbon source increases at the same rate as the control sample. Moreover, it was found that increasing the concentration of crude oil will result in increasing dry weight of Schizothrix vaginata however, and the chlorophyll content reduced in various crude oil treatments. The average biodegradation of petroleum hydrocarbon after 14 and 28 days of treatment was 54.78 and 93.98% respectively. Conclusions: It was found that cyanobacterium Schizothrix vaginata ISC108 has great potential in biodegradation of crude oil. Therefore, since oil is a product toxic to biological systems and is one of the main pollutants of bioecosystem, it has a great potential to be used as an indicator to eliminate pollution in contaminated areas.