Colonization of the cyanobacteria in the Bishnupur terracotta temples, one of the heritage sites of West Bengal, India is in an alarming state of deterioration now. Among the cyanobacteria Anabaena sp. (VBCCA 052002) has been isolated from most of the crust samples of terracotta monuments of Bishnupur. The identification was done using micromorphological characters and confirmed by 16S rRNA gene sequencing. The isolated strain produces enormous exopolysaccharides, which are extracted, hydrolyzed, and analyzed by HPLC. We have studied desiccation tolerance in this cyanobacterium and found biosynthesis of trehalose with an increase in durations of desiccation. The in vitro experiment shows that Chlorophyll-a and carotenoid content increase with fourteen days of desiccation, and cellular carbohydrates increase continuously. However, cellular protein decreases with desiccation. To gain insights into the survival strategies and biodeterioration mechanisms of Anabaena sp. in the desiccated conditions of the Bishnupur monuments, the present study focuses on the physiological aspects of the cyanobacteria under controlled in vitro conditions. Our study indicates that in desiccation conditions, trehalose biosynthesis takes place in Anabaena sp. As a result of the excessive sugar and polysaccharide produced, it adheres to the surface of the terracotta structure. The continuous contraction and expansion of these polysaccharides contribute to the biodeterioration of these monuments.