The marine cyanobacterium Prochlorococcus is the smallest and most abundant photosynthetic organism on Earth. In this Review, we summarize our understanding of the diversity of this remarkable phototroph and describe its role in ocean ecosystems. We discuss the importance of interactions of Prochlorococcus with the physical environment, with phages and with heterotrophs in shaping the ecology and evolution of this group. In light of recent studies, we have come to view Prochlorococcus as a 'federation' of diverse cells that sustains its broad distribution, stability and abundance in the oceans via extensive genomic and phenotypic diversity. Thus, it is proving to be a useful model system for elucidating the forces that shape microbial populations and ecosystems.