Water samples from different sites in Rankala lake of  Kolhapur city, were analysed over a period of one year for actinomycetes population. Microscopic, cultural, biochemical characters,pigmentation,cell wall analysis and spore morphology and other criteria were used to identify the actinomycetes isolates.Members of genus Streptomyces were identified by MICRO-IS software Portyrata and Krichevsky (1992). Isolates other than Streptomyces genus were identified using Bergeys manual of systematic bacteriology by Williams et.,al.(1989). The actinomycetes species identified are Streptomyces (32),Streptoverticillum (28), kineosporia (23), Sporichthya (18),Streptosporangium (16),Micromonospora (17), Nocardia (14), Microbispora (11),Spirillospora (9), Microbispora (7), Dactylosporangium (6),Actinoplanes (5), Planomonospora(3), Kitasatosporia (1). Isolates were screened for antibacterial and antifungal activity by Agar overlay technique  using two bacterial and four fungal species. Results indicated that the water from Rankala lake is rich in biodiversity of actinomycetes, 3 species showed antifungal activity and 13 showed antibacterial activity. It is the first study on microbiological aspect of Rankala lake. Present study indicated that the actinomycetes in Rankala Lake have a great potential to be an antibiotic producer and can be explored for antibiotic production.