The genetic diversity and phylogenetic position of 10 strains of picocyanobacteria from the Arabian Sea were examined using partial sequences from three loci: 16S rDNA, RNA polymerase rpoC1, and two elements of the phycoerythrin (PE) locus, cpeA and cpeB which encode for the α and β subunit of PE. Nine of the strains showed nearly identical spectral phenotypes based on the in vivo excitation spectrum for PE fluorescence emission and appear to be strains synthesizing a phycourobilin (PUB)–lacking PE. These strains include one, Synechococcus sp. G2.1, already known to be closely related to filamentous cyanobacteria and not to the commonly studied 5.1 subcluster of marine Synechococcus. The 10th strain was a PE-lacking strain that was of interest because it was isolated from open-ocean conditions where picocyanobacteria with this phenotype are relatively uncommon. Phylogenetic analysis of the concatenated 16S rDNA and rpoC1 data sets showed that none of the previously described strains were members of the 5.1 subcluster of marine Synechococcus, nor were they closely related to strain G2.1. Instead, they form a well-supported and previously undescribed clade of cyanobacteria that is sister to Cyanobium. Thus, these strains represent the first PE-containing Cyanobium from oceanic waters, and the lineage they define includes a strain with a PE-lacking phenotype from the same environment. Analysis of the PE sequence data showed the PE apoprotein has evolved independently in the G2.1 lineage and the Cyanobium-like lineage represented by the study strains. It also revealed a hypervariable region of the β-subunit not described previously; variation in this region shows a pattern among a wide range of PE-containing organisms congruent with the phylogenetic relationships inferred from other genes. This suggests that the PUB-lacking spectral phenotype is more likely to have evolved in distantly related phylogenetic lineages by either divergent or convergent evolution than by lateral gene transfer. Both the conserved PE gene sequences and the inferred amino acid sequences for the hypervariable region show considerable divergence among Prochlorococcus PEs, red algal PEs, PUB-containing PEs from the marine Synechococcus 5.1 subcluster, PEs from the Cyanobium-like strains, and PEs from other cyanobacteria (including strain G2.1). Thus, it appears that the hypervariable region of the PE gene can be used as a taxon-specific marker.