Abstract: The present work deals with the exopolysaccharides(EPS)and photosynthetic activities of Microcoleus vaginatus(one of the pioneer species in algal crusts at Shapotou, Linxia)With the concentration of EPS increasing, water holding capacity of desert soil was increasing,water evaporation was decreasing,and water movement through the desert soil was retarded The yield of exopolysaccharides was 28 82% of dry weight, and reached the maximum during the stationary phase Microcoleus had more carotenoid contents than other misted cells in view of its absorption spectrum;the most optimum temperature for photosynthesis was about 25℃, the most optimum light intensity for photosynthesis was 400μ Em-2·s-1, and photosynthetic activity was inhibited strongly after 0 3mol/l of NaCl; the value of Chlorophyll a fluorescence(Fv/Fm)recovered 96% of cultures after losing water to 56% of fresh weight It indicated that Microcoleus influenced the hydrological properties and played an important role in desert soil formation.