The filamentous Section V cyanobacterium Mastigocladus laminosus is one of the most morphologically complex prokaryotes. It exhibits cellular division in multiple planes, resulting in the formation of true branches, and cell differentiation into heterocysts, hormogonia and necridia. Here, we investigate branch formation and intercellular communication in M. laminosus. Monitoring of membrane rearrangement suggests that branch formation results from a randomized direction of cell growth. Transmission electron microscopy reveals cell junction structures likely to be involved in intercellular communication. We identify a sepJ gene, coding for a potential key protein in intercellular communication, and show that SepJ is localized at the septa. To directly investigate intercellular communication, we loaded the fluorescent tracer 5-carboxyfluorescein diacetate into the cytoplasm, and quantified its intercellular exchange by fluorescence recovery after photobleaching. Results demonstrate connectivity of the main trichome and branches, enabling molecular exchange throughout the filament network. Necridia formation inhibits further molecular exchange, determining the fate of a branch likely to become a hormogonium. Cells in young, narrow trichomes and hormogonia exhibited faster exchange rates than cells in older, wider trichomes. Signal transduction to co-ordinate movement of hormogonia might be accelerated by reducing cell volume.