It has been shown that some aerobic, unicellular, diazotrophic cyanobacteria temporally separate photosynthetic O2 evolution and oxygen-sensitive N2 fixation. Cyanothece sp. ATCC strain 51142 is an aerobic, unicellular, diazotrophic cyanobacterium that fixes N2 during discrete periods of its cell cycle. When the bacteria are maintained under diurnal light-dark cycles, N2 fixation occurs in the dark. Similar cycling is observed in continuous light, implicating a circadian rhythm. Under N2-fixing conditions, large inclusion granules form between the thylakoid membranes. Maximum granulation, as observed by electron microscopy, occurs before the onset of N2 fixation, and the granules decrease in number during the period of N2 fixation. The granules can be purified from cell homogenates by differential centrifugation. Biochemical analyses of the granules indicate that these structures are primarily carbohydrate, with some protein. Further analyses of the carbohydrate have shown that it is a glucose polymer with some characteristics of glycogen. It is proposed that N2 fixation is driven by energy and reducing power stored in these inclusion granules. Cyanothece sp. strain ATCC 51142 represents an excellent experimental organism for the study of the protective mechanisms of nitrogenase, metabolic events in cyanobacteria under normal and stress conditions, the partitioning of resources between growth and storage, and biological rhythms.