During 1996, the HAB monitoring program detected the presence of L. polyedra in the Setúbal Bay. One week later, a brownish discoloration of seawater was noticed and the species reached concentrations of 700,000 cells/l. The bloom lasted during ten days and the accompanying assemblage was dominated by Prorocentrum micans. An hydrographic/ phytoplankton cross-shelf section carried out in the Bay during the bloom period revealed conditions of stratification with a vertical gradient of 2.5ºC between 10 and 30m depth. L. polyedra was distributed until 20m with the maximum over the thermocline, at 5m depth. After one week of bloom detection, the encystment process seemed to be initiated, since L. polyedra cysts were observed in the water samples representing about 0.1% of the species population. At the same time, sediment samples collected in a harbour south of Setúbal bay showed an increase in cysts of L. polyedra with apparently viable cell content. At this site, where a long-term cyst study is being conducted, the relative percentages of viable cysts of this species went on increasing until January 1997. Although L. polyedra has been related with yessotoxin production elsewhere, the present fenomena was not associated with any problems of toxicity.