Cyanobacterial soil crusts are a community of microorganisms living in the soil surface of different habitats worldwide. Through photosynthesis, cyanobacteria produce extracellular polysaccharides (EPS) increasing the soil carbon (C) pool as carbohydrates. The layer of polysaccharides also acts as a mechanical structure surrounding the filamentous cyanobacteria that together with the soil particles form stable aggregates in the topsoil thus decreasing C loss by erosion. Thus despite their apparent importance to the dryland system we have only a limited understanding of their role and possible applications in dryland soil environments. This review draws on these disparate sources of information in order to provide a summary of our understanding of the characteristics, behaviour and influence of cyanobacterial EPS in dryland soils and makes recommendations for further research.