The efficiency of activated carbon prepared from Azadirachta indica stem carbon (AZSC) for the adsorption of acid yellow 7 from aqueous solution has been studied as a function of agitation time, adsorbent dosage, initial dye concentration, temperature and pH of adsorbate solution. The optimal conditions for the adsorption have been arrived and experiments were conducted to find out the Langmuir constants, Freundlich parameters and thermodynamic parameters such as ΔG°, ΔH° and ΔS°. Desorption studies were carried out for the recovery of both adsorbent and the dye.