Cultivation and culture-independent techniques were used to describe the geothermal ecosystem of the Blue Lagoon in Iceland. The lagoon contains both seawater and freshwater of geothermal origin and is extremely high in silica content. Water samples were collected repeatedly in summer and autumn in 2003 and 2005 and in winter 2006 were analyzed for species composition. The study revealed the typical traits of an extreme ecosystem characterized by dominating species and other species represented in low numbers. A total of 35 taxa were identified. The calculated biodiversity index of the samples was 2.1–2.5. The majority (83%) of analyzed taxa were closely related to bacteria of marine and geothermal origin reflecting a marine character of the ecosystem and the origin of the Blue Lagoon hydrothermal fluid. A high ratio (63%) of analyzed taxa represented putative novel bacterial species. The majority (71%) of analyzed clones were Alphaproteobacteria, of which 80% belonged to the Roseobacter lineage within the family of Rhodobacteraceae. Of seven cultivated species, the two most abundant ones belonged to this lineage. Silicibacter lacuscaerulensis was confirmed as a dominating species in the Blue Lagoon. One group of isolates represented a recently identified species within the genus of Nitratireductor within Rhizobiales. This study implies an annually stable and seasonally dynamic ecosystem in the Blue Lagoon.