The light saturation effect imposes a serious limitation on the efficiency with which solar energy can be utilized in outdoor algal cultures. One solution proposed to reduce the intensity of incident solar radiation and overcome the light saturation effect is "spatial dilution of light" (i.e., distribution of the impinging photon flux on a greater photosynthetic surface area), but consistent experimental data supporting a significant positive influence of spatial light dilution on the productivity and the photosynthetic efficiency of outdoor algal cultures have never been reported. We used a coiled tubular reactor and compared a near-horizontal straight tubular reactor and a near-horizontal flat panel in outdoor cultivation of the cyanobacterium Arthrospira (Spirulina) platensis under defined operating conditions for optimum productivity. The photosynthetic efficiency achieved in the tubular systems was significantly higher because their curved surface "diluted" the impinging solar radiation and thus reduced the light saturation effect. This interpretation was supported by the results of experiments carried out in the laboratory under continuous artificial illumination using both a flat and a curved chamber reactor. The study also showed that, when the effect of light saturation is eliminated or reduced, productivity and solar irradiance are linearly correlated even at very high diurnal irradiance values, and supported findings that outdoor algal cultures are light-limited even during bright summer days. It was also observed that, besides improving the photosynthetic efficiency of the culture, spatial dilution of light also leads to higher growth rates and lowers the cellular content of accessory pigments; that is, it reduces mutual shading in the culture. The inadequacy of using volumetric productivity as the sole criterion for comparing reactors of different surface-to-volume ratio and of the areal productivity for evaluating the performance of elevated photobioreactors operated outdoors is stressed; it is furthermore suggested that the photosynthetic efficiency achieved by the culture also be calculated to provide a suitable parameter for comparison of different algal cultivation systems operated under similar climatic conditions. Copyright 1998 John Wiley & Sons, Inc.