The nitrogen-fixing bacterium, Nostoc, is a commonly occurring cyanobacterium often found in symbiotic associations. We investigated the potential of cycad cyanobacterial endosymbionts to synthesize microcystin/nodularin. Endosymbiont DNA was screened for the aminotransferase domain of the toxin biosynthesis gene clusters. Five endosymbionts carrying the gene were screened for bioactivity. Extracts of two isolates inhibited protein phosphatase 2A and were further analyzed using electrospray ionization mass spectrometry (ESI-MS)/MS. Nostoc sp. 'Macrozamia riedlei 65.1' and Nostoc sp. 'Macrozamia serpentina 73.1' both contained nodularin. High performance liquid chromatography (HPLC) HESI-MS/MS analysis confirmed the presence of nodularin at 9.55±2.4 ng μg-1 chlorophyll a in Nostoc sp. 'Macrozamia riedlei 65.1' and 12.5±8.4 ng μg-1 Chl a in Nostoc sp. 'Macrozamia serpentina 73.1' extracts. Further scans indicated the presence of the rare isoform [L-Har(2)] nodularin, which contains L-homoarginine instead of L-arginine. Nodularin was also present at 1.34±0.74 ng ml(-1) (approximately 3 pmol per g plant ww) in the methanol root extracts of M. riedlei MZ65, while the presence of [L-Har(2)] nodularin in the roots of M. serpentina MZ73 was suggested by HPLC HESI-MS/MS analysis. The ndaA-B and ndaF genomic regions were sequenced to confirm the presence of the hybrid polyketide/non-ribosomal gene cluster. A seven amino-acid insertion into the NdaA-C1 domain of N. spumigena NSOR10 protein was observed in all endosymbiont-derived sequences, suggesting the transfer of the nda cluster from N. spumigena to terrestrial Nostoc species. This study demonstrates the synthesis of nodularin and [L-Har(2)] nodularin in a non-Nodularia species and the production of cyanobacterial hepatotoxin by a symbiont in planta.