Chlor-alkali industries occupy an important place so far as pollution of the environment with mercury is concerned. Main aspects of pollution with regard to chlor-alkali industry are the release of mercury into the environment. The effluent of a chlor-alkali industry (M/s. Jayashree chemicals Pvt. Ltd., Ganjam) showed significant variation and difference in action at different concentrations. The highest concentration showed typical mercurial toxic symptoms, beyond which survival of the alga became extremely difficult and at times, impossible under laboratory controlled conditions. The blue-green alga is more tolerant and less sensitive to toxicants. At higher concentration, all most all the growth parameters studied showed declining trend in exposed cultures, when compared to control cultures. At lower concentration of amended effluent all the growth parameters showed an increasing trend in the exposed culture, when compared to control culture. Hence, it can be concluded that the toxicant (mercury contained) showed dichotomous behaviour. The observed changes in the exposed cultures when compared to control cultures, was only due to the toxicant, amended effluent. No significant visible morphometric change was noticed in the exposed alga. At higher concentration, bleaching of the cells was marked. Stimulation of growth was not marked at lower concentration of the toxicant as all growth parameters showed lower values, when compared to the control value. Inhibition of growth was recorded at higher concentrations of the toxicant as all growth parameters showed significantly low values. At all exposed concentrations, the optical density and dry weight of the exposed alga decreased when compared to control indicating stress. Hence, the effluent should be diluted and properly treated to remove the total mercury present in the effluent before discharge into the environment.