Aflatoxin contamination is a major problem in several food crops. Aflatoxin, a mycotoxin,produced by Aspergillus flavus has gained immense concern in the scientific world because of itstremendous harmful effects. The study was focused to see the effect of oil and aqueous extract ofneem (Azadirachta indica) seeds on the growth of Aspergillus and production of aflatoxin by themold. Various amounts of neem oil (5 - 50 µl/ml) and aqueous extract of neem (5 - 50 mg/ml) wereused both in the broth as well as the solid medium. Fungistatic (MIC) and minimal fungicidalconcentrations (MFC) were found to be 10 µl/ml and 50 µl/ml respectively for neem seed oil. Atthe concentration of 5 µl/ml neem oil and 5 mg/ml of aqueous extract, a significant decrease in theaflatoxin content was found in broth medium. Aflatoxin production was totally inhibited at 50µl/ml and 50 mg/ml for neem oil and aqueous extract of neem respectively, in both treatments.There was significant inhibition of mycelium dry weight by the neem seed oil. Mycelial growthwas totally inhibited at 20 µl/ml of neem seed oil concentration in broth, whereas it was notaffected at all by aqueous extract. It can therefore be inferred that the oil and extract from the neemseed leads to inhibition of aflatoxin production while neem seed oil also significantly inhibits themycelial growth. Neem seed oil thus can be used as potent, natural and easily available anti-aflatoxigenic agent.