Nodularia spumigena is a filamentous diazotrophic cyanobacterium that dominates the annual late summer cyanobacterial blooms in the Baltic Sea. But N. spumigena also is common in brackish water bodies worldwide, suggesting special adaptation allowing it to thrive at moderate salinities. A draft genome analysis of N. spumigena sp. CCY9414 yielded a single scaffold of 5,462,271 nucleotides in length on which genes for 5,294 proteins were annotated. A subsequent strand-specific transcriptome analysis identified more than 6,000 putative transcriptional start sites (TSS). Orphan TSSs located in intergenic regions led us to predict 764 non-coding RNAs, among them 70 copies of a possible retrotransposon and several potential RNA regulators, some of which are also present in other N2-fixing cyanobacteria. Approximately 4% of the total coding capacity is devoted to the production of secondary metabolites, among them the potent hepatotoxin nodularin, the linear spumigin and the cyclic nodulapeptin. The transcriptional complexity associated with genes involved in nitrogen fixation and heterocyst differentiation is considerably smaller compared to other Nostocales. In contrast, sophisticated systems exist for the uptake and assimilation of iron and phosphorus compounds, for the synthesis of compatible solutes, and for the formation of gas vesicles, required for the active control of buoyancy. Hence, the annotation and interpretation of this sequence provides a vast array of clues into the genomic underpinnings of the physiology of this cyanobacterium and indicates in particular a competitive edge of N. spumigena in nutrient-limited brackish water ecosystems.