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Thick‐walled, nonmotile cysts (termed hypnocysts) of two dinoflagellates were isolated from estuarine sediments in Cape Cod, Massachusetts, and germinated to produce their respective motile, thecate stages. Hypnocysts from Orleans district were identified as Gonyaulax excuvata (Braarud) Balech sensu Loeblich & Loeblich. Visually identical hypnocysts from Falmouth district were provisionally identified as Gonyaulax tamarensis Lebour. Both species were toxic. A geographic survey in September detected hypnocysts in only the sediments of locations where toxic blooms developed the preceding and following Spring. Laboratory incubation (16 C) of hypnocysts from sediment samples stored in the dark (5 C) for 6 mo initiated excystment by the temperature increase, with no appreciable effect from light regime, nutrient, or chelator concentrations. Motility of excysted germlings was optimum in highly chelated medium and in the presence of light. We conclude that hypnocysts of both tasa are important in seeding recurrent annual blooms, synchronizing early bloom development with vernal warning of seawater and increasing the geographic range of the species. We suggest that many red tides in New England and eastern Canadian waters are initiated through the displacement of motile estuarine populations into nearshore area by tidal advection and surface runoff, although the potential existence and importance of offshore cyst reservoirs cannot be discounted. Evidence is presented that hypnocysts are probable sexual zygotes whereas the thin‐walled cysts readily formed in laboratory cultures (pellicle cyst) are asexual. Pellicle cysts are of limited durability, do not overwinter in nature, and therefore do not play a significant role in initiating toxic blooms.

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