Biological soil crusts (biocrusts) are formed by soil-surface communities of biota that live within, or immediately on top of, the uppermost millimeters of soil. They consist of cyanobacteria, algae, mosses, microfungi, and lichenized fungi (hereafter, lichens). Cyanobacterial and microfungal filaments, rhizinae and rhizomorphs of lichens, and rhizinae and protonemata of bryophytes weave throughout the top few millimeters of soil, gluing loose soil particles together (Fig. 1). The intimate association between soil particles and organisms forms a coherent crust. A quantitative estimate of global biological crust cover is difficult to obtain and not yet available, but the worldwide coverage of the terrestrial surface by biocrusts is very high. In arid and semiarid areas, biocrusts may constitute up to or more than 70% of the living cover and dryland (hyper-arid, arid, semi-arid, and polar deserts) ecosystems, where they often dominate, cover ~40% of the terrestrial land mass (Pointing and Belnap 2014). Lichens and microfungi are an essential and often dominant part of biocrusts. About one fifth (19 %) of all known species of fungi are lichenized; that is, they form a stable symbiotic association with green algal or/and cyanobacterial photobionts that provide nutrients for the mycobiont (fungi). The vast majority of lichenized fungi belong to the Ascomycota, with 42% of all fungi in this group forming lichens (Kirk et al., 2001). About 85% of lichen-forming fungi are symbiotic with Chlorophyta (green algae, creating "chlorolichens), approximately 10% with Cyanophyta, (creating "cyanolichens"), and the remainder are associated simultaneously with both groups. About 40 genera of photobionts have been identified in lichens: 25 are green algae and 15 are cyanobacteria. The autotrophic lifestyle of lichens requires an exposure of the green thallus to light. Most lichens are long-lived organisms with high habitat specificity. They are especially ecologically successful in dryland areas where competition with phanerogamous vegetation is reduced. It is estimated that approximately 8% of the earth's terrestrial surface has lichens as its most dominant life-form (Ahmadjian 1995). One of their most important habitats are biocrusts, which lichens often dominate. In the present Chapter we concentrate on those widely distributed biocrusts in which free-living and lichenized fungi play a dominating role. We describe their community structure, analyze the special properties and functions of these organisms as key members of biocrusts, and then discuss the function of the fungi-rich biocrusts as components of larger ecosystems and landscapes (for details and specific literature, see Belnap and Lange 2003).