When combined, lichenized fungi create a whole new body form, called a thallus. Judging by the success of their partnership, it seems clear that the algae also benefit from the arrangement. Their fungal protector enables them to succeed in places where they cannot survive alone. The cyanobacteria also provide a nitrogen source. The photobiont's cell walls are more permeable to carbohydrate loss when lichenized than when free living.
Some fungi produce haustoria that physically penetrate the resident algal cells.
Lichens produce a variety of secondary products that occur as extracellular crystals within the thallus. Most of these chemicals are unknown in free-living fungi or other organisms, and are unique to the symbiosis. The fungal partner may enhance water uptake for the algae, and often provides protection from high light intensities. As a partnership of unlike organisms, lichens can only reproduce asexually. Sexual spores are produced only by the fungus.