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Cluster 5 picocyanobacteria significantly contribute to primary productivity in aquatic ecosystems. Estuarine populations are highly diverse and consist of many co-occurring strains, but their physiology remains largely understudied. In this study, we characterized 17 novel estuarine picocyanobacterial strains. Phylogenetic analysis of the 16S rRNA and pigment genes (cpcB and cpeBA) uncovered multiple estuarine and freshwater-related clusters and pigment types. Assays with five representative strains (three phycocyanin rich and two phycoerythrin rich) under temperature (10–30°C), light (10–190 μmol photons m−2 s−1), and salinity (2–14 PSU) gradients revealed distinct growth optima and tolerance, indicating that genetic variability was accompanied by physiological diversity. Adaptability to environmental conditions was associated with differential pigment content and photosynthetic performance. Amplicon sequence variants at a coastal and an offshore station linked population dynamics with phylogenetic clusters, supporting that strains isolated in this study represent key ecotypes within the Baltic Sea picocyanobacterial community. The functional diversity found within strains with the same pigment type suggests that understanding estuarine picocyanobacterial ecology requires analysis beyond the phycocyanin and phycoerythrin divide. This new knowledge of the environmental preferences in estuarine picocyanobacteria is important for understanding and evaluating productivity in current and future ecosystems.