Crude phycocyanin extract (PC-E) from a two-phase cultured Saharian Arthrospira sp. strain with a purity grade of 1.24 (reagent grade) was characterized regarding its stability, bio-functionality and bio-activity. PC-E showed higher solubility values above pH 6.0, while the maximum stability was achieved at pH 6.0. PC-E was stable only up to 50 degrees C, while the addition of stabilizing agents (PEG-4000 and sorbitol) significantly enhanced thermostability. FTIR and DSC analysis revealed that thermostabilization by PEG-4000 and sorbitol addition was achieved through hydrogen bound and amorphous glass formation. Emulsifying and foaming properties of PC-E were concentration-dependent. PC-E displayed antioxidant activity in a dose dependent manner, including beta-carotene bleaching inhibition, ferrous chelating effect, and 2,2-diphenyl-1-picrylhydrazyl (DPPH) radical scavenging activity of 63%, 78% and 100% at 5 mg mL(-1), respectively. Moreover, PC-E exhibited great antibacterial activity at 5 mg mL(-1) against Staphylococcus aureus, Micrococcus luteus, Escherichia colt and Pseudomonas sp.