Water loss has significant effects on physiological performance and survival rates of algae. However, despite the prominent presence of aeroterrestrial algae in terrestrial habitats, hardly anything is known about the molecular events that allow aeroterrestrial algae to survive harsh environmental conditions. We analyzed the transcriptome and physiology of a strain of the alpine aeroterrestrial alga Klebsormidium crenulatum under control and strong desiccation-stress conditions. Principal findings: For comparison we first established a reference transcriptome. The high-coverage reference transcriptome includes about 24,183 sequences (1.5 million reads, 636 million bases). The reference transcriptome encodes for all major pathways (energy, carbohydrates, lipids, amino acids, sugars), nearly all deduced pathways are complete or missing only a few transcripts. Upon strong desiccation, more than 7000 transcripts showed changes in their expression levels. Most of the highest up-regulated transcripts do not show similarity to known viridiplant proteins, suggesting the existence of some genus- or species-specific responses to desiccation. In addition, we observed the up-regulation of many transcripts involved in desiccation tolerance in plants (e.g. proteins similar to those that are abundant in late embryogenesis (LEA), or proteins involved in early response to desiccation ERD), and enzymes involved in the biosynthesis of the raffinose family of oligosaccharides (RFO) known to act as osmolytes). Major physiological shifts are the up-regulation of transcripts for photosynthesis, energy production, and reactive oxygen species (ROS) metabolism, which is supported by elevated cellular glutathione content as revealed by immunoelectron microscopy as well as an increase in total antiradical power. However, the effective quantum yield of Photosystem II and CO2 fixation decreased sharply under the applied desiccation stress. In contrast, transcripts for cell integrative functions such as cell division, DNA replication, cofactor biosynthesis, and amino acid biosynthesis were down-regulated. Significance: This is the first study investigating the desiccation transcriptome of a streptophyte green alga. Our

This is the first study investigating the desiccation transcriptome of a streptophyte green alga. Our results indicate that the cellular response is similar to embryophytes, suggesting that embryophytes inherited a basic cellular desiccation tolerance from their streptophyte predecessors.