Pleurotus ostreatus, a white rot fungus, is capable of bioremediating a wide range of organic contaminants including Polycyclic Aromatic Hydrocarbons (PAHs). Ergosterol is produced by living fungal biomass and used as a measure of fungal biomass. The first part of this work deals with the extraction and quantification of PAHs from contaminated sediments by Lipid Extraction Method. The second part consists of the development of a novel extraction method (Ergosterol Extraction Method), quantification and bioremediation.