Background The phylogeny and taxonomy of cyanobacteria is currently poorly understood due to paucity of reliable markers for identification and circumscription of its major clades. Results A combination of phylogenomic and protein signature based approaches was used to characterize the major clades of cyanobacteria. Phylogenetic trees were constructed for 44 cyanobacteria based on 44 conserved proteins. In parallel, Blastp searches were carried out on each ORF in the genomes of Synechococcus WH8102, Synechocystis PCC6803, Nostoc PCC7120, Synechococcus JA-3-3Ab, Prochlorococcus MIT9215 and Prochlor. marinus subsp. marinus CCMP1375 to identify proteins that are specific for various main clades of cyanobacteria. These studies have identified 39 proteins that are specific for all (or most) cyanobacteria and large numbers of proteins for other cyanobacterial clades. The identified signature proteins include: (i) 14 proteins for a deep branching clade (Clade A) of Gloebacter violaceus and two diazotrophic Synechococcus strains (JA-3-3Ab and JA2-3-B'a); (ii) 5 proteins that are present in all other cyanobacteria except those from Clade A; (iii) 60 proteins that are specific for a clade (Clade C) consisting of various marine unicellular cyanobacteria (viz. Synechococcus and Prochlorococcus); (iv) 14 and 19 signature proteins that are specific for the Clade C Synechococcus and Prochlorococcus strains, respectively; (v) 67 proteins that are specific for the Low B/A ecotype Prochlorococcus strains, containing lower ratio of chl b/a2 and adapted to growth at high light intensities; (vi) 65 and 8 proteins that are specific for the Nostocales and Chroococcales orders, respectively; and (vii) 22 and 9 proteins that are uniquely shared by various Nostocales and Oscillatoriales orders, or by these two orders and the Chroococcales, respectively. We also describe 3 conserved indels in flavoprotein, heme oxygenase and protochlorophyllide oxidoreductase proteins that are specific for either Clade C cyanobacteria or for various subclades of Prochlorococcus. Many other conserved indels for cyanobacterial clades have been described recently. Conclusions These signature proteins and indels provide novel means for circumscription of various cyanobacterial clades in clear molecular terms. Their functional studies should lead to discovery of novel properties that are unique to these groups of cyanobacteria.