Acetylene reduction activity, an index of nitrogen fixation, by epiphytic and epibenthic algae and coral debris was measured in seagrass beds around Green Island, Australia. Epiphytic blue-green algae showed a high activity, ranging from 56.1 ± 31.9 to 729 ± 105 mmol (g chl a)^-1d^-1 on a chlorophyll basis, or 3.9 μmol N₂ m^-2d^-1 to 16 mmol N₂ m^-2d^-1 on an areal basis. The activities on an areal basis were comparable to those reported in a Fijian seagrass bed, whereas activities on a chlorophyll basis were higher on Green Island than on Fiji. A relatively high activity was observed on the leeward side of the island, partly due to the high seagrass biomass and partly due to the high epiphyte biomass. This trend of high activity on the leeward side of the island suggested that the biomass and/or activity of nitrogen fixing blue-green algae could be affected by unknown mechanism (s) related to the island environment. Algae on (or in) coral debris, which were abundant around live corals, were able to reduce acetylene.