A simple growth model for unicellular algae is used to show that environmentally induced changes in cellular composition can be explained in terms of controlled adjustments acting to maximize the specific growth rate. The model is based on a division of cellular carbon into four distinct compartments: carbon associated with the photosynthetic apparatus, carbon associated with those components engaged in macromolecular synthesis, carbon associated with structural components and stored carbon. Flows of material between compartments, and between cells and their environment, are defined in terms of the environmental conditions and the distribution of carbon amongst compartments. Given that growth is balanced under a specific set of environmental conditions, there exists a unique, optimal allocation of carbon for which the rate of growth is maximal. Changes in this optimal allocation of material induced by changes in light intensity, nutrient availability or temperature are qualitatively similar to compositional changes observed in a wide variety of algal species. Empirical estimates for each of the model parameters are derived and used to show that reasonable quantitative agreement between observed and predicted behaviour is attainable. The model and parameter set are also used to illustrate the influence of cell size on growth rate. Under a given set of environmental conditions, the function relating cell size to growth rate has a single maximum. The size at which growth rate is maximal varies inversely with light intensity and directly with nutrient availability and temperature. Such behaviour is consistent with some empirical observations on the influence of environmental factors on the size distribution of natural phytoplankton communities. © 1979.