In the last decade the screening of microalgae, especially the cyanobacteria (blue-green algae), for antibiotics and pharmacologically active compounds has received ever increasing interest. A large number of antibiotic compounds, many with novel structures, have been isolated and characterised. Similarly many cyanobacteria have been shown to produce antiviral and antineoplastic compounds. A range of pharmacological activities have also been observed with extracts of microalgae, however the active principles are as yet unknown in most cases. Several of the bioactive compounds may find application in human or veterinary medicine or in agriculture. Others should find application as research tools or as structural models for the development of new drugs. The microalgae are particularly attractive as natural sources of bioactive molecules since these algae have the potential to produce these compounds in culture which enables the production of structurally complex molecules which are difficult or impossible to produce by chemical synthesis.