The rapid development of life is leading the demand of colors in biotechnology in field of food, textile, medicine and cosmetics and healthcare products. There is ever growing demand of ecofriendly/non-toxic dyes as coloring agents of food to overcome health hazards. The risks of synthetic colors compel the industries to adapt natural pigments. The search for new sources of natural pigments has increased, day to day because of the toxic effects caused by synthetic dyes. Recently fungal species are being treated as the natural pigment producers with enormous biotechnological applications. Almost all the genus of fungi synthesize various pigments such melanin, phenazines,flavins,carotenoids, violacein, indioankaflavins. So far these pigments are isolated,screened, and characterized for many biotechnological purposes in food, textiles, medicine, cosmetics health care products. However sequencing of pigment producing genes and generation of new varieties of pigments by rDNA technology may lead to revolutionary success in pigment production market in food, textile, medicine, cosmetics and health care products by a natural means. Study on pigment producing fungi using cloning technology may pave a path for ecofriendly generation of varieties of colors which further can be explored in many biological applications