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Similar Characteristics
Blue-green algae and cyanobacteria share very similar characteristics, and are therefore classified together as members in phylum Cyanophyta -- a phylum is a category in biological taxonomy. These photosynthetic organisms contain chlorophyll and prefer aquatic habitats. Both are procaryotes in that neither has a nuclear membrane to isolate the nucleus and its genetic material from the rest of the cell, and they both lack mitochondria.
Nitrogen Fixing Bacteria
Cyanobacteria play a key role in capturing atmospheric nitrogen (N2) and combining it with hydrogen to form ammonia, nitrates and nitrite. These nitrogen compounds can be biosynthesized into amino acids and nucleotides that are essential in protein synthesis. Nitrogen fixing bacteria also live in soil and the roots of legumes and function in fertilizing soil.
Chlorophyll Pigments and Photosynthesis
Blue-green algae cells derive their energy and nourishment from photosynthesis. They function as phytoplankton, living in the upper levels of the oceans, ponds, lakes and other water bodies that solar radiation penetrates. Cyanobacteria carry the green chlorophyll pigment. They also contain a specific form of chlorophyll: chlorophyll a. The other photosynthetic bacteria do not.
Habitat
Cyanobacteria form an algae slime along wet cliffs, ponds or lakes with soils rich in organic matter. Some prefer freshwater and others are saltwater residents. Wherever they live, they cyanobacteria are responsible for the blue-green color of water bodies. The Red Sea in the Middle East is an exception. It gets its red color from a variety of cyanobacteria that contains a red pigment masking the blue-green chlorophyll. Many species live in the soil and put their nitrogen fixing ability to work as they enrich it by the process of nitrogen fixation.