Abstract: The fate and ultrastructural changes of Anabaena azollae entrapped into the developing sporocarps of Azolla pinnata were followed and characterized by laser confocal scanning image system (LCSIS) and transmission electron microscopy The entrapped vegetative Anabaena hormogonia tended to run parallelly to the long axis of the young sporocarps and underwent an active division,forming eventually an Anabaena colony,which occupied the entire indusial chamber and all the space available around the megasporangium or microsporangia Some of the vegetative cells initiated differentiation to akinetes while the opening of the chamber was closed At an intermediate stage of the sporocarp development,all the vegetative cells on the hormogonia gradually transformed into the akinete like chains Ultrastructurally the preakinetes underwent the cytoplasm reorganization and the membrane systems rearrangement The inclusions,such as carboxysomes,cyanophycin granules,ribosomes and thylakoids,varied in number,size,and their distribution in the cell along with the differentiation course of the akinete The similarities and differences in differentiation patterns and ultrastructural feature between the endophytic and free living cyanobacteria as well as their possible significance were discussed