Significance The heterocyst-forming cyanobacteria represent a true multicellular system found in the bacterial world that adds unique features to biodiversity. They grow as chains of cells containing two metabolically interdependent cellular types, the vegetative cells that fix carbon dioxide performing oxygenic photosynthesis and the dinitrogen-fixing heterocysts. Heterocysts accumulate a cell inclusion, cyanophycin [multi-L-arginyl-poly (L-aspartic acid)], as a nitrogen reservoir. We have found that the second enzyme of cyanophycin catabolism, isoaspartyl dipeptidase, is present at significantly higher levels in vegetative cells than in heterocysts, identifying the nitrogen-rich dipeptide β-aspartyl-arginine as a nitrogen vehicle to the vegetative cells and showing that compartmentalization of a catabolic route is used to improve the physiology of nitrogen fixation.