The main objective of this study was to evaluate the acute toxicity of raw, neutralized and physico-chemically treated and biologically treated effluent of herbal pharmaceutical industry. The acute toxicity test was determined using freshwater crustacean Ceriodaphnia dubia under laboratory conditions. LC₅₀ values for raw, neutralized and physico-chemically treated effluent for 12, 24, 36 and 48 h ranged between 3.0–4.5%, 3.9–10.8% and 22–28% respectively. It is evident from the results that physicochemical treatment reduced the toxicity by around 25% while biological treatment reduced the toxicity completely. Results subjected to statistical evaluation depicted regression coefficient of more than 0.9 indicating good correlation between the mortality rate and effluent concentrations.