Synechococcus sp. represents an ecologically diverse group of cyanobacteria found in numerous environments, including hot-spring microbial mats, where they are spatially distributed along thermal, light and oxygen gradients. These thermophiles engage in photosynthesis and aerobic respiration during the day, but switch to fermentative metabolism and nitrogen fixation at night. The genome of Synechococcus OS-B', isolated from Octopus Spring (Yellowstone National Park) contains a phn gene cluster encoding a phosphonate (Phn) transporter and a C-P lyase. A closely related isolate, Synechococcus OS-A, lacks this cluster, but contains genes encoding putative phosphonatases (Phnases) that appear to be active only in the presence of the Phn substrate. Both isolates grow well on several different Phns as a sole phosphorus (P) source. Interestingly, Synechococcus OS-B' can use the organic carbon backbones of Phns for heterotrophic growth in the dark, whereas in the light this strain releases organic carbon from Phn as ethane or methane (depending on the specific Phn available); Synechococcus OS-A has neither of these capabilities. These differences in metabolic strategies for assimilating the P and C of Phn by two closely related Synechococcus spp. are suggestive of niche-specific constraints in the evolution of nutrient assimilation pathways and syntrophic relationships among the microbial populations of the hot-spring mats. Thus, it is critical to evaluate levels of various P sources, including Phn, in thermally active habitats and the potential importance of these compounds in the biogeochemical cycling of P and C (some Phn compounds also contain N) in diverse terrestrial environments.