Microscopic green algae inhabiting desert microbiotic crusts are remarkably diverse phylogenetically, and many desert lineages have independently evolved from aquatic ancestors. Here we worked with five desert and aquatic species within the family Scenedesmaceae to examine mechanisms that underlie desiccation tolerance and release of unicellular versus multicellular progeny. Live cell staining and time-lapse confocal imaging coupled with transmission electron microscopy established that the desert and aquatic species all divide by multiple (rather than binary) fission, although progeny were unicellular in three species and multicellular (joined in a sheet-like coenobium) in two. During division, Golgi complexes were localized near nuclei, and all species exhibited dynamic rotation of the daughter cell mass within the mother cell wall at cytokinesis. Differential desiccation tolerance across the five species, assessed from photosynthetic efficiency during desiccation/rehydration cycles, was accompanied by differential accumulation of intracellular reactive oxygen species (ROS) detected using a dye sensitive to intracellular ROS. Further comparative investigation will aim to understand the genetic, ultrastructural and physiological characteristics supporting unicellular versus multicellular coenobial morphology, and the ability of representatives in the Scenedesmaceae to colonize ecologically diverse, even extreme, habitats.