Nitrogenase activity, measured as acetylene reduction, was recorded at rates up to 1028 nmol.h \g * dry weight for Codium adhaerens (Cabr.) Ag. var. convolutum Dellow and Codium fragile (Sur.) Hariot subsp. tomentosoides (Van Goor) Silva collected from New Zealand habitats. In both species the ability to reduce acetylene is invariably associated with the presence of a heterocystous blue-green alga, Calothrix sp., epiphytic or embedded in the Codium thallus. A highly significant (P < 0.001) correlation between heterocyst frequency and nitrogenase activity was found. Nitrogenase and net photosynthesis of the Codium-Calothrix system have different steady-state responses to light intensity, and the kinetics of the two processes also differ in that nitrogenase is slow to respond to illumination or darkening. Glucose additions to Codium did not significantly increase nitrogenase activity. Nitrogenase is relatively insensitive to oxygen tension over the range 0-1.0 atm (0-1.033 kgf.cnT2) and still occurs at 1.5 atm (1.55 kgf.cm"2); this condition is unique in all nitrogenase systems thus far reported. Collectively these facts suggest that Calothrix is the agent primarily responsible for nitrogenase activity in these Codium species.