We studied the microbial diversity of benthic cyanobacterial mats inhabiting a heavily polluted site in a coastal stream (Wadi Gaza) and monitored the microbial community response induced by exposure to and degradation of four model petroleum compounds in the laboratory. Phormidium- and Oscillatoria -like cyanobacterial morphotypes were dominant in the field. Bacteria belonging to different groups, mainly the Cytophaga - Flavobacterium - Bacteriodes group, the γ and β subclasses of the class Proteobacteria , and the green nonsulfur bacteria, were also detected. In slurry experiments, these communities efficiently degraded phenanthrene and dibenzothiophene completely in 7 days both in the light and in the dark. n -Octadecane and pristane were degraded to 25 and 34% of their original levels, respectively, within 7 days, but there was no further degradation until 40 days. Both cyanobacterial and bacterial communities exhibited noticeable changes concomitant with degradation of the compounds. The populations enriched by exposure to petroleum compounds included a cyanobacterium affiliated phylogenetically with Halomicronema . Bacteria enriched both in the light and in the dark, but not bacteria enriched in any of the controls, belonged to the newly described Holophaga - Geothrix - Acidobacterium phylum. In addition, another bacterial population, found to be a member of green nonsulfur bacteria, was detected only in the bacteria treated in the light. All or some of the populations may play a significant role in metabolizing the petroleum compounds. We concluded that the microbial mats from Wadi Gaza are rich in microorganisms with high biodegradative potential.