During the process of photosynthesis, phytoplankton produces oxygen as a byproduct. Due to their vast and widespread populations, algae and cyanobacteria are responsible for approximately half of all the oxygen found in the ocean and in our atmosphere. During day time they float, due to the accumulation of oxygen. Whereas the reverse happens during the night, which is explained below.
In addition to providing food and oxygen for nearly all life on Earth, phytoplankton help to regulate inorganic carbon (carbon dioxide) in the atmosphere. During photosynthesis, carbon dioxide and water molecules are used to make sugar for energy. The process of incorporating inorganic carbon into organic carbon (glucose and other biologically useful compounds) is called carbon fixation and is part of the biological carbon pump.
As carbon fixation and oxygen production are part of the same process, the extent of phytoplanktons participation is on the same scale. Phytoplankton consumes a similar amount of carbon dioxide as all land plants combined. While phytoplankton can pull carbon dioxide from the atmosphere or the ocean, it will have a similar effect. Carbon dioxide that is taken from the water is replaced by carbon dioxide from the atmosphere.