The aim of this work was to study the production of poly-3-hydroxybutyrate (PHB) under nitrogen limited conditions by Bacillus sphaericus NII 0838 using crude glycerol from biodiesel industry as sole carbon source. Effect of various process parameters on PHB production such as glycerol concentration, inoculum size and pH of the medium were optimized. Characterization of extracted PHB was carried out by FT-IR, ¹H and 13C NMR. Results showed that the bacterial culture accumulated about 31% PHB in crude glycerol medium. The extracted PHB was blended with other polymers to improve its physical characteristics. The thermal properties of the polymer like melting temperature (Tm) and heat of fusion (ΔHf) were determined using DSC.