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Biological fixation of nitrogen by cyanobacteria is believed to be a significant source of plant available nitrogen in arid ecosystems. This study was carried out in south-western Queensland and obtained basic data on nitrogen mineralisation from soils where cyanobacteria are a significant component of the soil surface ecosystem. Our results indicated that mineralisable nitrogen was always greater in the surface soil, irrespective of seasonal condition, and was significantly greater on the crust type with a sandy covering compared with the surfaces devoid of sand. We conclude that during drought, small falls of rain combined with dew are sufficient to maintain cyanobacteria in an active state. The sandy covering over the crust probably stimulates nitrogen production by creating anaerobic conditions that also reduce the loss of gaseous nitrogen through volatilisation.