In the Yarqon River during 2003-2006 we identified 313 taxa of algae and cyanobacteria belonging to eight taxonomical divisions. 85.6% of species were indicators of environmental conditions that characterized the river water as alkaline with medium mineralization. In rainy and dry seasons the algal taxonomic compositions were very different with prevailing diatoms in the winter and cyabobacteria and greens in summer. Bio-indication and experiments shows that self-purification process was more intensive during the rainy season, while the low level of river water in the dry season stressed out the algal community and take 2-3 weeks. By employing CCA analysis some indicators of highly mineralized water with high pH, anthropogenic pollution, and euthrophication were revealed as well as biosensor species sensitive to the advent of anthropogenic pollution. We therefore conclude that the combination of bioindicational and bio-test methods with statistics is effective in the determination of the main factors influencing algal diversity. The obtained results can be used for water quality assessment and in monitoring systems of Israeli and other Mediterranean coastal rivers.