Temporal and spatial variation of phytoplankton in Bandar Al-Khyran Bay was studied in 2008 for a period of six months at three different stations (BK1, BK2, BK3). The interaction between phytoplankton, bacterial abundance and composition in relation to changes in environmental conditions was investigated. Water samples from the surface were collected on weekly basis for the entire study period. Sea surface temperature fluctuated in Bandar Khyran Bay with maximum values during summer (32°C) and minimum values during winter (21°C). Surface dissolved oxygen concentration at the surface remained high from January to mid-March with concentrations ranging between 7 to 8.9 mg/L, followed by a decline until mid-May. On the other hand, total Chl a concentration showed a clear seasonal trend characterized by two peaks in February and toward the end of March. Generally, Chl a concentration remained below 1 ug/L throughout the sampling period. A total of 171 net phytoplankton taxa were identified. Diatoms contributed with the highest number of species (86) followed by dinoflagellates (82) and dictyocha (1) and cyanobacteria (2). Chaetoceros and Rhizosolenia showed the largest contribution of Bacillariophyceae (diatoms) with 9 and 8 different species respectively. Dinophyceae (dinoflagellates) were dominated by Ceratium and Protoperidinium sp. with 19 and 14 different species respectively. A total number of 23 species identified in this study were considered toxic or harmful in different concentrations. Bacterial abundance closely followed the seasonal and spatial variation of Chi a. Highest abundance occurred at station 2 (3.34E+05 cells/cm) in June while for the rest of the sampling period bacterial abundance remained at lower levels (less than 5.00E+04 gnificant correlation was obtained between bacterial abundance and Chla at BK1 and BK3 while BK2 showed no correlation.