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Amongst a specialised group of psychrophilic microalgae that have adapted to thrive exclusively in summer snow fields, Chloromonas nivalis has been reported as a species causing green, orange or pink blooms in many alpine and polar regions worldwide. Nevertheless, the cytology, ecophysiology and taxonomy of this species are still unresolved. Intracellular processes during cyst formation, which is the dominant stage on snow fields, were examined with samples from the European Alps to better understand the cellular strategies of a green alga living in this harsh habitat. We show with two different methods, i.e. oxygen optode fluorometry and by chlorophyll fluorescence, that the cysts are photosynthetically highly active, although they do not divide, and that Chloromonas nivalis can cope with low as well as high light conditions. During cyst formation, the chloroplast is fragmented into several smaller parts, enlarging the surface to volume ratio. The pool of xanthophyll-cycle pigments is significantly enlarged, which is different from other snow algae. The cytoplasm is filled with lipid bodies containing astaxanthin, a secondary carotenoid that causes the typical orange colour. The cyst wall surface possesses characteristic elongate flanges, which are assembled extracellulary by accumulation of material in the periplasmatic interspace. Comparison of Chloromonas nivalis samples from different locations (Austrian Alps, Spitsbergen) by molecular methods indicates genetic variations due to spatial isolation, while a North American strain has no close relationship to the taxon.