Species of the unicellular alga Dunaliella possess outstanding tolerance of a wide range of salinities. They can adapt to grow in salt media which range from less than 0.5 M to saturated salt solutions and withstand enormous osmotic shocks through a unique osmotic adaptation. The osmoregulating mechanism depends on photosynthetic production of glycerol, whose intracellular concentration varies in direct proportion to the extracellular salt concentration and reaches values in excess of 50% of the total dry weight of the cells. Dunaliella, and another halotolerant glycerol producing alga, Asteromonas gracilis, osmoregulate biochemically by controlling glycerol biosynthesis and degradation. 3 new enzymes, NADPH-dihydroxyacetone-reductase, dihydroxyacetone kinase and glycerol-1-phosphatase seem to be involved in the osmoregulatory response via glycerol in Dunaliella and Asteromonas. A hypothetical scheme of glycerol metabolism in these algae utilizing these enzymes is presented. Growth studies of Dunaliella indoors and outdoors showed that salt concentrations favoring maximal glycerol productivity are not identical with those required for maximal algal productivity. Maximal yield of glycerol occurred around 2 M NaCl while maximal algal productivity occurred below 0.5 M NaCl. Observed yields of glycerol in Dunaliella culture outdoors are compared with theoretically calculated maximal yield.