The aim of this research was to study the biodiversity of cyanobacteria and microalgae in hydro-terrestrial habitats from the area of Hornsund fjord (Svalbard archipelago). This research is particularly important, because hitherto no complex research (including all taxonomic groups) has previously been conducted on the cyanobacterial and microalgal flora in Arctic water ecosystems. The research was conducted during the summer seasons of 2011 and 2013. Shannon’s diversity index was used to describe species diversity and evenness. Data on cyanobacteria and microalgae were analyzed using the MVSP and PCA. Additionally, a basic analysis of the physicochemical properties of water in the studied ecosystems was performed. A total of 506 taxa were noted in the studied hydro-terrestrial habitats. The most numerous group was cyanobacteria, constituting 35% of all recorded taxa. Ochrophyta and Chlorphyta were almost equally numerous (percentage again as for cyanobacteria). Nineteen types of assemblages were noted in all studied hydro-terrestrial habitats. The diversity of cyanobacteria and microalgae and the assemblages formed by them were used to determine the characteristics of the studied ecosystems. Each type of water ecosystem was represented by specific phycoflora and assemblages. Ecological parameters along with biological data (the diversity of cyanobacteria and microalgae) allowed us to sort the studied hydro-terrestrial habitats by similarity. Our analyses clearly distinguished water ecosystem groups differing in species composition determining their trophic status. The research shows the usefulness of cyanobacteria and microalgae diversity defined by the Shannon-Weaver index for characterizing bodies of water and determining the trophic status of these habitats.