The unicellular green alga Haematococcus pluvialis has recently attracted great interest due to its large amounts of ketocarotenoid astaxanthin, 3,3'-dihydroxy-beta,beta-carotene-4,4'-dione, widely used commercially as a source of pigment for aquaculture. In the life cycle of H. pluvialis, astaxanthin biosynthesis is associated with a remarkable morphological change from green motile vegetative cells into red immotile cyst cells as the resting stage. In recent years we have studied this morphological process from two aspects: defining conditions governing astaxanthin biosynthesis and questioning the possible function of astaxanthin in protecting algal cells against environmental stress. Astaxanthin accumulation in cysts was induced by a variety of environmental conditions of oxidative stress caused by reactive oxygen species, intense light, drought, high salinity, and high temperature. In the adaptation to stress, abscisic acid induced by reactive oxygen species, would function as a hormone in algal morphogenesis from vegetative to cyst cells. Furthermore, measurements of both in vitro and in vivo antioxidative activities of astaxanthin clearly demonstrated that tolerance to excessive reactive oxygen species is greater in astaxanthin-rich cysts than in astaxanthin-poor cysts or astaxanthin-less vegetative cells. Therefore, reactive oxygen species are involved in the regulation of both algal morphogenesis and carotenogenesis, and the accumulated astaxanthin in cysts can function as a protective agent against oxidative stress damage. In this study, the physiological roles of astaxanthin in stress response and cell protection are reviewed.