Filamentous eukaryotic algae were found completely embedded in the tunic matrix of 6 species of ascidians from the cold-temperate waters of southern New Zealand: the aplousobranch Aplidium thomsoni (Polyclinidae) and 5 solitary stolidobranchs, Asterocarpa humilis (Styelidae) and Pyura cancellata, P. carnea, P. pulla, and P. suteri (Pyuridae). All the ascidians appeared to be completely healthy, and the stolidobranchs showed evidence of tunic blood vessel hypertrophy in the regions of algal filaments. Only those individuals growing in at least a low-light environment contained algae; individuals of the same species growing in dark conditions contained none. The algal symbionts include Neevea repens (Rhodophyta), Pseud endoclonium submarinum and Ostreobium quekettii (Chlorophyta), and an unidentified filamentous (probable) phaeophyte. Dense growths of Neevea and Pseudendoclonium were found in the tunic matrix in all six ascidians, most abundantly just under the tunic cuticle but extending several millimeters into the tunic. Subsequent recent discovery of filamentous chlorophytes in the tunic of two species of American Pacific coast solitary ascidians leads us to conclude that this algal habitat may be a widespread phenomenon that has been overlooked in the supposition that the algae were merely epizoic. Most of these ascidians also contained numerous alga-filled tunic pockets probably formed during the incorporation of sand grains with epipsammic algae that later proliferated. Though previously noted anecdotally in the literature, this report is the first compilation of this algal assemblage. They include Sarcinochrysis marina (Chrysophyta), unidentified diatoms, unicellular chlorophytes, and the prokaryote cyanobacteria Dermocarpa, Xenococcus, and Synechococcus. Similar species, along with Oscillatoria, Spirulina, and Anabaena, were also found in the inter-tunic cavity of the peculiar double-tunic ascidians Pyura cancellata and P. carnea.