A modified microbial polysaccharide based biopolymer has been investigated as a potential candidate towards development of sustainable biomaterials and bioplastics. An in-depth study was carried out to biosynthesize, characterize and assess any possible mutagenic potential and ecotoxicity of the microbial polysaccharide biopolymer. Microstructural investigations using confocal microscopy, Fourier transform (FT)-Raman depth profile mapping and scanning electron microscopy (SEM) of the biosynthetically modified polysaccharide revealed internal structural perturbations, as well as occlusion of granular pores by extraneous materials. The Raman 3D mapping depth profile along with time-of-flight (MALDI-TOF) mass spectrometry also indicated important structural and surface modifications, which could be correlated to the production of microbial exopolysaccharides and secondary metabolites. The study then looked into any possible genetic mutation and ecological risks associated with the biosynthetically modified polysaccharide through the investigation of genotoxicity and ecotoxicity. The genotoxicity study was carried out through bacterial reverse gene mutation (Ames) test by using two different strains (TA98 and TA100) of bacteria. The results did not indicate any mutagenic effect against either of the strains used for the biopolymer samples and was found to be genotoxically safe. Ecotoxicity tests, carried out using bioluminescent bacteria Vibrio fisheri further indicated no ecotoxicity within the given experimental conditions. The study measured the half maximal effective concentration (EC50) to cause a 50% decrease in the light output of the bacteria, a measure of ecotoxicological response of the biopolymer. Overall, results from this study indicated that the novel biopolymer was genotoxically and ecotoxically safe, which offers immense potential for future use of this biopolymer.