The present study aimed to assess the potentiality of water soluble fungal pigments for dyeing on cotton yarn. Five different shades of pigments were extracted from Monascus purpureus, Isaria farinosa, Emericella nidulans, Fusarium verticillioides, and Penicillium purpurogenum using ethanol. Maximum concentration of pigment was obtained from Monascus purpureus (red, $25.02{pm}1.6$ UA) followed by Penicillium purpurogenum (yellow, $23.05{pm}0.3$ UA). The optimum dyeing condition was observed at a pigment concentration of 1 gram, pH 5, temperature $80^{circ}C$, time duration 90 min, and a liquor ratio of 1:30 was found to be the optimal for dyeing. Maximum uptake of 80 % was achieved with Monascus purpureus red pigment. Moreover, the effect of mordant in dyeing was evaluated by different mordanting methods. A strong variation in shade and color depth could be achieved by using pre-mordanting method with alum and ferrous sulfate giving better wash fastness properties when compared with post-mordanting or without a mordant.