A symbiotic, heterocystous, N2-fixing blue-green alga, isolated from the coralloid roots of a xerophytic plant,Cycas revoluta, grew best in liquid medium supplemented with 4 mM NO 3 (-) . Morphologically, the isolated alga was identical to that of the natural endophyte but the cell size had decreased markedly. The alga was heterotrophic. Intact coralloid roots had nearly 4 to 5 times more nitrogenase activity compared with natural- and laboratory-grown agla but nitrate reductase was inducible in both the forms. Plasmid(s) were found in both algal forms.