Of 70 pure microbial cultures isolated from aquatic habitats, soil, and air according to the ability to lyse live blue-green algae, 62 were fungi representing the genera Acremonium, Emericellopsis, and Verticillium. Algal-lysing fungi were isolated from all habitat types sampled. The remaining isolates comprised four bacteria and four streptomycetes. All isolates lysed Anabaena flos-aquae and, in most cases, several other filamentous and unicellular blue-green algae. The fungi generally showed greater activity than most other isolates towards a wider range of susceptible algae, including green algae in some cases. Acremonium and Emericellopsis isolates, but not Verticillium, also inhibited the growth of blue-green algae and gram-positive bacteria, but did not lyse the latter. Lysis of blue green algae by Acremonium and Emericellopsis spp. was associated with the formation of diffusible heat-stable extracellular factors which, evidence suggests, could be cephalosporin antibiotic(s). Blue-green algae were also lysed by pure cephalosporin C. The frequent isolation of lytic fungi from algal habitats suggests a possible natural algal-destroying role for such fungi, which might be exploitable for algal bloom control.