Symbioses between cyanobacteria (or eukaryotic algae and their plastids) and protists or invertebrates are well known and are important in evolution and ecology. However, no such symbioses have been previously reported in arthropods. An ultrastructural study of a branchiopod crustacean (Daphnia obtusa) from temporary ponds consistently revealed plastids inside gut endocytes. Plastids were most frequent in animals from shaded woodland ponds. Ultrastructure indicated that plastids in D. obtusa (a) are sequestered cyanobacteria and plastids from eukaryotic algae, and (b) senesce, suggesting that these generalist grazers have not closely coevolved with a plastid source. Daphnia obtusa (and other cladocerans?) in temporary ponds may benefit from plastid presence in several ways (nutrition, oxygen, calcium availability); daphnids inhabiting permanent waters may be less selected for plastid uptake. This paper represents an extension of plastid endosymbiosis into the Arthropoda, and indicates more sophisticated evolutionary and ecological interactions between these important crustacean herbivores and their food than previously recognized.