Whereas in freely suspended cell cultures growing photoautotrophically under non-limiting carbon conditions nitrite and nitrate were simultaneously consumed after ammonium consumption was complete, in alginate-entrapped cell cultures a sequential consumption of nitrite (first) and nitrate was observed after ammonium had almost been fully removed. In this paper results are reported that show inhibition of nitrate consumption by nitrite in immobilized cells. However no inhibition of nitrate active transport was observed. The sequential consumption of ammonium, nitrite and nitrate by Ca-alginate immobilized cells is explained on the basis of local ammonium accumulation due to its photoproduction by photorespiration, that could be caused by the increase of the O2/CO2 ratio around the entrapped cells. Measurements of light-dependent oxygen production (LDOP) and activity levels of nitrogen assimilation enzymes, including nitrite reductase (NiR) and glutamine synthetase (GS) in immobilized cells, determined under photorespiration stimulating conditions, are shown that support this explanation.