Soil blue-green algae flora of desert area in China was firstly studied in this paper. The species composition and abundance of typical, dune、gobi and hill were analysed in the east and mid parts of the Qaidam Basin. Fuzzy cluster, cluster and linear correlations were used in determining the correlation between environment and algae. The factor affecting the growth and distribution of Nostoc flagelliforme is discussed emphatically. Twenty one species of blue-green algae were identified. Among them Phormidium foveolarum and Lyngbya digueti occurred most frequently, followed by Microcoleus vaginatus; Schizothrix undulatus; Myxosarcina chroococcoides; Myxosarcina concinna; Schizothrix undulatus; Tolypothrix fragilis; Anabaena variabilis f. tenuis; Anabaena oscillarioides f. minor were firstly recorded in China. The most common species in algae community of Basin's gobi and dune were Phormidium foveolarum and Lyngbya digueti. However much more species were found in hill of east Basin. Moisture plays the primary role on the growth of soil algae in desert area. Essential factors affecting the species number and abundance of soil algae in the Qaidam are soil ionic strengths and soil texture which influencing cohesiveness and retention of water. Significant positive correlation between biomass and PO_4-P concentration was also found. Drought in certain extent, microenvironment supplying periodically of moisture, soil high in calcium and iron but low in manganese constant are the favorable condition for growth and distribution of Nostoc flagelliforme.