Soil cyanobacteria are considered pioneer microorganisms in the formation of biocrusts, which, in turn, are recognized as ecosystem engineers in edaphic environments due to their influence on erosion control, nutrient cycling, and water dynamics in the soil. Thus, cyanobacteria have considerable potential for use in the recovery of degraded soil. However, greater knowledge on the ecophysiological characteristics of biocrust-forming cyanobacteria is needed. Therefore, the aim of the present study was to assess the development of Scytonema hyalinum and Leptolyngbya sp. (cyanobacteria) under different conditions of water availability and investigate the improvement in soil quality. The strains were inoculated in Petri dishes containing soil collected from a desertification-prone region. Water availability (with and without water limitation) was controlled over 78 days of the experiment. Cyanobacterial development (measured by chlorophyll-a concentration) was better in treatments without water limitation. Higher water availability favored the formation of biocrusts by Leptolyngbya sp., which increased soil resistance, and the vigorous growth of S. hyalinum, whose trichomes aggregated on the soil surface and also contributed to greater soil stability. The results confirmed that water is an important factor in the development of both strains. More importantly, the results demonstrated that, due to their distinct eco-physiological characteristics, the species have the potential to be used complementarily in restoration projects for degraded areas, as Leptolyngbya exhibited a greater capacity for soil stabilization, while S. hyalinum exhibited greater growth.