Allelopathic effects of the aqueous extract of the medicinal plant; Achillea santolina on growth and distribution of two associated soil algae; Chlorella vulgaris (Chlorophyta) and Lyngbya contorta (Cyanophyta) were investigated under controlled laboratory conditions. The phytochemical analysis of A. santolina showed that it contains essential oils, flavonoids, glycosides, phenolic compounds, sterols, triterpenes and tannins. The algal flora inhabiting the soil away (control site) and underneath of A. santolina rooting zone were also identified. The results cleared a remarkable negative allelopathic effect of A. santolina aqueousextract on growth of L. contorta, and a detrimental positive effect on growth of C. vulgaris. Similarly, growth of C. vulgaris was significantly (P ≤ 0.01) inhibited especially at the higher extract concentrations. Growth promotion (p ≤ 0.05) of L. contorta was attained at high concentrations. The stress effect on protein profile and antioxidant activity was more prominent in C. vulgaris than L. contorta. The allelopathic effect of A. santolina extract may be due to the high concentrations of both flavonoids and total phenolics (7.98 and 29.72 mg/g, respectively).