Extraction and purification of C-phycocyanin were performed by the combined use of powdered activated carbon (PAC) treatment and aqueous two-phase extraction from fresh Cyanobacteria mud in Chaohu Lake. Firstly, the effects of PAC on purification of C-phycocyanin were studied by considering the dosage of powdered activated carbon. Then, the single factor and orthogonal experiments were conducted to determine the optimum conditions in the PAC treatment and aqueous two-phase purification, which were PEG 4000 as polymer, the PEG 4000 concentration 4%, the potassium phosphate concentration 16% and pH 7.0. The verification test showed that after the purification by the optimized process, the purity and recovery rate of C-phycocyanin could reach to 3.461 7 and 63%, respectively. It was with less equipment requirements, lower cost and shorter time, etc., compared with traditional methods.