Unicellular cyanobacteria have recently been recognized for their contributions to nitrogen fixation in marine environments, a function previously thought to be filled mainly by filamentous cyanobacteria such as Trichodesmium. To begin a systems level analysis of the physiology of the unicellular N(2)-fixing microbes, we have sequenced to completion the genome of Cyanothece sp. ATCC 51142, the first such organism. Cyanothece 51142 performs oxygenic photosynthesis and nitrogen fixation, separating these two incompatible processes temporally within the same cell, while concomitantly accumulating metabolic products in inclusion bodies that are later mobilized as part of a robust diurnal cycle. The 5,460,377-bp Cyanothece 51142 genome has a unique arrangement of one large circular chromosome, four small plasmids, and one linear chromosome, the first report of a linear element in the genome of a photosynthetic bacterium. On the 429,701-bp linear chromosome is a cluster of genes for enzymes involved in pyruvate metabolism, suggesting an important role for the linear chromosome in fermentative processes. The annotation of the genome was significantly aided by simultaneous global proteomic studies of this organism. Compared with other nitrogen-fixing cyanobacteria, Cyanothece 51142 contains the largest intact contiguous cluster of nitrogen fixation-related genes. We discuss the implications of such an organization on the regulation of nitrogen fixation. The genome sequence provides important information regarding the ability of Cyanothece 51142 to accomplish metabolic compartmentalization and energy storage, as well as how a unicellular bacterium balances multiple, often incompatible, processes in a single cell.