The arid desert area is expanding by 6 million ha year−1. Nostoc, a terrestrial cyanobacterium, is known as a pioneer organism which can photosynthesize, fix atmospheric nitrogen, and secrete polysaccharides. In order to explore the potential of Nostoc as a countermeasure to soil desertification, we have investigated the effects of Nostoc on the chemical and physical properties of soil and on plant growth in outdoor and laboratory experiments. The effect of Nostoc on soil properties, when applied on the surface of soil in plastic containers, was determined after cultivation for 90 days outdoors. Its effect on plant growth and nutrient uptake was determined by growing Nostoc with Komatsuna (Brassica rapa var. peruviridis) on a soil-less culture in a plastic petri dish incubated inside a growth chamber for 14 days. Two colonies of Nostoc with different shapes were also examined for their tolerance to dryness and salinity. Nostoc application resulted in an increase in the organic carbon and nitrogen content of the surface soil and enhanced plant growth and plant iron uptake, but soil temperature and moisture were maintained. Spherical-shaped Nostoc showed a higher tolerance to dryness and salinity than irregular-shaped Nostoc, and the former was able to rectify problematic soil better than the latter. The results indicate that the application of Nostoc to soil has a potential for increasing soil organic matter and reclaiming degraded soil ecosystems.