IN TOTAL 47 soil algal morphospecies were cultured and identified from the desert soils of El-Farafra Oasis, The Western Desert (Egypt). The most of them were related to Cyanophyta (34 algal taxa), followed by Chlorophyta and Xanthophyta (5 algal taxa belonging to each). Bacillariophyta represented only by 3 species. Moreover, this work enriched the Egyptian soil algal flora with 5 different algal taxa: Westiellopsis prolifica Janet, Cylindrospermum gregarium (Zakrz.), Cylindrospermum. licheniforme (Bory) Kütz., Chlorocloster caudatus Pasch. and Tetraktis aktinastroides Pasch. Furthermore, the potentialities of atmospheric N2-fixation efficiency of Calothrix elenkinii Kossinsk., Nodularia harveyana f. sphaerocarpa (Born. et Flah.) Elenk., Scytonema ocellatum Lyngb., Stratonostoc linckia (Roth) Elenk. and Westiellopsis prolifica Janet were investigated. However, C. elenkinii, W. prolifica and S. ocellatum exhibited to a large extent the highest fixation rates with mean values of 18.89, 30.52 and 33.01 μmole ml-1 h-1, respectively, followed by S. linckia (16.71 μmole ml-1 h-1) and Nodularia harveyana f. sphaerocarpa (12.01 μmole ml-1 h-1). In conclusion, Scytonema ocellatum and Westiellopsis prolifica can used as promising eco-friendly natural bio-fertilizers for the sustainable development in the desert habitats.