MICROCYSTIS aeruginosa MDEG1 strain from El-Manzala Lake (Damietta, Egypt) was identified classically by its morphological characteristics. Its identification was confirmed using 16S rRNA gene sequencing. Different concentrations (1, 10, 25 and 50mg/ml) of petroleum ether and chloroform of M. aeruginosa MDEG1 extracts were examined for their antibacterial activity by well diffusion technique. Petroleum ether extract had a high activity against K. pneumoniae, P. aeruginosa and S. aureus. Chloroform extract exhibited higher activity against K. pneumoniae. Gas chromatography, mass spectrophotometry (GC-MS) and H-proton nuclear magnetic resonance (1H-NMR) analysis revealed the presence of Hexadecanoic acid (Palmitic acid) and its methyl ester derivative as major constituents of petroleum ether and chloroform algal extract, that might be involved in their antibacterial activity. The cytomorphology using scanning electron microscopy (SEM) for treated K. pneumonia (Nosocomial infection bacteria) with M. aeruginosa extract (Chloroform, 50mg/ml) showed appearance of giant cell formation, while transmission electron microscope (TEM) showed ruptured bacterial cell wall damage with extrusion of cytoplasmic content indicating its bactericidal effect.