Cephalodia are pockets of cyanobacteria. Cephalodia either grow on the outside surface of the thallus lobe; on the outer surface of a pseudopodetium; or inside the thallus between the outer fungal layers. Cephalodia only occur in lichens that have a green alga as a primary algae in the main thallus. Cyanobacteria (also called bluegreen algae) are very important to us all because they make the nitrogen in the air usable by plants.

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