- Abstract The aim of this research was to study the relationships between the biological soil crusts (BSC), spectral reflectance and photosynthetic activity. Twenty field campaigns, each lasting several days, were conducted during the 2002–2003 rainy season at sand dune and loess environments in the north-western Negev desert of Israel. Simultaneous measurements of CO 2 net exchange and spectral reflectance were carried out for several types of BSC. The Normalized Difference Vegetation Index (NDVI) was derived from the BSC reflectance and correlated with their CO 2 exchange data. The relationship between NDVI and CO 2 exchange is discussed in detail with respect to environmental factors, such as soil water content, air temperature, and light intensity. Fairly good correlations were found in the rainy season. The NDVI was useful in indicating the potential magnitude and capacity of the BSC assimilation activity. Furthermore, the index corresponded well with different rates of photosynthetic activity of the different types of microphytes. The results demonstrate that spectral reflectances of the BSC can be related to photosynthetic activities and posseses the potential to assess the amount of carbon sequestration by these microphytes on an areal scale using satellite images.