The current study was performed to assess the effect of nitrogen-fixing (Cyanobacteria), isolated from Egyptian soil to improve and enhance natural poorly sandy soil. Four cyanobacterial species were isolated & identified as Anabaena variabilis, Nostoc paludosum, N. entophytum & N. sp. Z-medium proved the satisfied results giving the best growth within 50 days among other media. Bacteria free cultures were obtained, as the combination of chlorine water & mercuric chloride method was the most effective method used. Cyanobacterial growth was followed by determination of dry weight, acetylene reduction activity and total nitrogen. Algal species were inoculated separately to sandy soil allowed them growing .Physical and chemical characteristics of treated soil were determined. The results showed that the inoculation of different algal species to soil caused a significant enhancement in both physical and chemical properties of soil.