Photosynthesis for the generation of fuels and chemicals from cyanobacteria and microalgae offers the promise of a single host organism acting both as photocatalyst and processor, performing sunlight absorption and utilization, as well as CO2 assimilation and conversion into product. However, there is a need to develop methods for generating, sequestering, and trapping such bio-products in an efficient and cost-effective manner that is suitable for industrial scale-up and exploitation. A sealed gaseous/aqueous two-phase photobioreactor was designed and applied for the photosynthetic generation of volatile isoprene (C5H8) hydrocarbons, which operates on the principle of spontaneous diffusion of CO2 from the gaseous headspace into the microalgal or cyanobacterial-containing aqueous phase, followed by photosynthetic CO2 assimilation and isoprene production by the transgenic microorganisms. Volatile isoprene hydrocarbons were emitted from the aqueous phase and were sequestered into the gaseous headspace. Periodic replacement (flushing) of the isoprene (C5H8) and oxygen (O2) content of the gaseous headspace with CO2 allowed for the simultaneous harvesting of the photoproducts and replenishment of the CO2 supply in the gaseous headspace. Reduction in practice of the gaseous/aqueous two-phase photobioreactor is offered in this work with a fed-batch and a semi-continuous culturing system using Synechocystis sp. PCC 6803 heterologously expressing the Pueraria montana (kudzu) isoprene synthase (IspS) gene. Constitutive isoprene production was observed over 192 h of experimentation, coupled with cyanobacterial biomass accumulation. The diffusion-based process in gaseous/aqueous two-phase photobioreactors has the potential to be applied to other high-value photosynthetically derived volatile molecules, emanating from a variety of photosynthetic microorganisms. Biotechnol. Bioeng. 2012;109: 100–109. © 2011 Wiley Periodicals, Inc.