The principal contributors of biologically fixed N in natural grassland ecosystems appear to be asymbiotic bacteria and heterocystous cyanobacteria. The environmental factors of light, moisture, and temperature play important roles in the magnitude of the N2‐fixation activity. Biological N2‐fixation was measured in the Elizabeth's Prairie section of the Lynx Prairie Preserve, Adams County, Ohio, during 15 site visits beginning 29 March through 8 November 1980. In situ N2‐fixation activity was measured using the acetylene‐reduction technique. The percentage cover of cyanobacterial colonies (Nostocsp.) was determined using Point‐Frame Analysis. Soil and air temperatures and soil water potentials also were measured. Intact soil cores with a surface cover ofNostocwere collected and returned to the laboratory to quantify the effect of decreasing water potential on the N2(C2H2)ase activity ofNostoc.The N2(C2H2)ase activity ofNostocon the intact soil cores displayed a linear response of approximately 10% decrease in N2(C2H2)ase activity per one bar decrease in soil water potential. The cyanobacteria contributed almost all of the biologically fixed N at the site until late June. From late June through to mid September, heterotrophic diazotrophs played the major role in the N2‐fixation activity. These changes are attributed to fluctuations inNostocsp. colony cover, temperature, and soil water potentials. Extrapolation of the measured rates, and assuming an average of 10 hr per day of activity,Nostocsp. is shown to have contributed 4.60 ± 1.17 kg N ha−1yr−1. Heterotrophic diazotrophs contributed an estimated 3.19 ± 1.18 kg N ha−1yr−1. The total biological N2‐fixation for the site was calculated at 8.2 ± 2.55 kg N ha−1yr−1, from additional measurements which estimated total diazotrophic activity of the site. These rates of N2‐fixation are among the highest reported for temperate grassland habitats.