A field experiment was carried out at Ismailia Agric. Res. Station during the summer season of 2005 to study the integrated effect of the application of different N-forms, i.e., mineral fertilizer (Ammonium sulphate) and\ or organic fertilizer (compost) combined with or without cyanobacterial inoculation on improving peanut productivity as well as the effect on soil organic matter content and some biological soil properties. Results revealed that generally the integration between the organic (compost) and mineral fertilizers in peanut cultivation was more beneficial than the use of either compost or mineral nitrogen fertilizer each alone. Also cyanobacteria inoculation was better in enhancing the growth and yield of peanut. However, this integration phenomena, was more pronounced when the integration included the treatment of  ¹/₂ RN from compost + ¹/₂ RN from mineral fertilizer in addition to cyanobacteria inoculation. This treatment gave significantly the highest values of peanut seed and foliage yields, NPK uptake for seed and foliage, soil microbial community and soil biological activity in terms of CO₂ evolution and dehydrogenase activity. The integration of organic and mineral fertilizers in combination with biofertilizers may become a promise of the eco-friendly future agriculture, especially in the newly reclaimed sandy soil.