Although calcification processes and the carbonate deposits in Halimeda have been described in many papers, previous workers have failed to recognize that a reorganization of crystals occurs within living individuals of common species of this alga. Detailed SEM observations of live Halimeda incrassata collected in Biscayne Bay, Florida, show that calcification occurs in two basic stages: (1) uniform-sized, small aragonite needles, 1-3 mu m long, are precipitated in inter-utricle spaces and (2) these needles alter to anhedral equant aragonite approximately 0.1-0.5 mu m in size. In addition, large aragonite needles, up to 15 mu m long, are precipitated in open spaces, typically in the inner cortical and medullary regions during the second stage of calcification. Micritization of original skeletal needles in H. incrassata is extensive but is not readily detected with the petrographic microscope. Preliminary observations of another common species, H. opuntia , suggest that similar alteration processes also occur in this alga. Early micritization in live algae may be an important process of skeletal alteration that has not previously been recognized. This early alteration must be distinguished from postdepositional diagenetic processes in the sediment.