Signature lipid biomarker (SLB) analysis is a useful tool for identifying microorganisms and characterizing microbial communities in natural systems. Specific fatty acids, especially phospholipids (PLFA), are essential membrane components, make up a relatively constant proportion of the microorganisms under natural conditions and their patterns provide insight into the bacterial and fungal community structure and biomass. This method is based on direct extraction of fatty acids from cultured bacteria or environmental samples and determining the isolated methyl ester fatty acids (FAME) using gas chromatography (GC). Several PLFAs are useful markers for the detection of the specific groups, and whole cell fatty acid analysis is used for routine identification of microbial species. The fatty acid analysis has been successfully applied for the characterization of microbial communities from agricultural soils, from sites contaminated with heavy metals, aromatic compounds, alkaline dust, acid rain and from other diverse habitats.