Microalgal lipids and fatty acids are important components for achieving biofuel because of their potential high productivity. Although fatty acids that have a hydroxy group adjacent to the end of the acyl chain might be an important chemical feedstock, most algae do not accumulate it. To produce (ω−1)-hydroxy fatty acids from 3-hydroxybutylyl-CoA, an intermediate for polyhydroxybutylate biosynthesis in the cyanobacterium Synechocystis sp. PCC 6803, we expressed a gene for the promiscuous 3-ketoacyl-ACP synthase III from Alicyclobacillus acidocalderius (aaKASIII) by the cpc560 promoter. To supply 3-hydroxybutyryl-CoAs for aaKASIII, the phaC gene for polyhydroxybutylate polymerase was deleted, and the phaAB genes for 3-hydroxybutyryl-CoA synthesis from Cupriavidus necator were overexpressed. The genetically modified strain synthesized 15-hydroxyhexadecanoic acid, 17-hydroxyoctadecanoic acid, and 17-hydroxyoctadec-9-enoic acid, and accumulated approximately 2.1 mol% of (ω−1)-hydroxy fatty acids in total fatty acids under illumination with 70 μmol photons m−2 s−1, although its growth was severely retarded. Under weak light (35 μmol photons m−2 s−1) conditions, the strain grew as well as the wild-type and showed lower hydroxy fatty acids (0.04 mol%) accumulation than that at higher illumination levels. The photosynthetic activity of this strain was lower than that of wild-type cells, suggesting that high light conditions enhanced hydroxy fatty acids production and inhibited photosynthesis. (ω−1)-Hydroxy fatty acids were not predominantly observed in the galactolipids from thin-layer chromatography, which are the major lipid classes in cyanobacteria. To the best of our knowledge, this is the first report on photoautotrophic production of fatty acids possessing a functional group near the end of the acyl chain in cyanobacteria.