Background Salinity is known to affect almost half of the world's irrigated lands, especially rice fields. Furthermore, cyanobacteria, one of the critical inhabitants of rice fields have been characterized at molecular level from many different geographical locations. This study, for the first time, has examined the molecular diversity of cyanobacteria inhabiting Indian rice fields which experience various levels of salinity. Results Ten physicochemical parameters were analyzed for samples collected from twenty experimental sites. Electrical conductivity data were used to classify the soils and to investigate relationship between soil salinity and cyanobacterial diversity. The cyanobacterial communities were analyzed using semi-nested 16S rRNA gene PCR and denaturing gradient gel electrophoresis. Out of 51 DGGE bands selected for sequencing only 31 which showed difference in sequences were subjected to further analysis. BLAST analysis revealed highest similarity for twenty nine of the sequences with cyanobacteria, and the other two to plant plastids. Clusters obtained based on morphological and molecular attributes of cyanobacteria were correlated to soil salinity. Among six different clades, clades 1, 2, 4 and 6 contained cyanobacteria inhabiting normal or low saline (having EC < 4.0 ds m-1) to (high) saline soils (having EC > 4.0 ds m-1), however, clade 5 represented the cyanobacteria inhabiting only saline soils. Whilst, clade 3 contained cyanobacteria from normal soils. The presence of DGGE band corresponding to Aulosira strains were present in large number of soil indicating its wide distribution over a range of salinities, as were Nostoc, Anabaena, and Hapalosiphon although to a lesser extent in the sites studied. Conclusion Low salinity favored the presence of heterocystous cyanobacteria, while very high salinity mainly supported the growth of non-heterocystous genera. High nitrogen content in the low salt soils is proposed to be a result of reduced ammonia volatilization compared to the high salt soils. Although many environmental factors could potentially determine the microbial community present in these multidimensional ecosystems, changes in the diversity of cyanobacteria in rice fields was correlated to salinity.