Siderophores are low-molecular-weight compounds excreted by microorganisms to acquire iron and possibly to monopolize iron resource to achieve competitive advantage over other strains, or to trade for other substrates in mutualistic relationships. Siderophores that employ β-hydroxy-aspartate (β-OH-Asp) for iron chelation can undergo UV-mediated photolytic cleavage, simultaneously reducing Fe3+ to Fe2+. Photolytic siderophores can promote algal-bacterial mutualism, where the bacteria provide iron in exchange for dissolved organic carbon. We present a comprehensive characterization of cyanochelin B, a photolytic β-OH-Asp-containing siderophore produced by the filamentous cyanobacterium Leptolyngbya sp. NIES-3755. Combining nuclear magnetic resonance, high-resolution mass spectrometry, bioinformatic analyses, and Marfey’s and Murata’s method, we elucidated the structure of cyanochelin B, including the configuration of its stereocenters. Cyanochelin B-iron complexes rapidly photolyse under UV light (t1/2 = 2.3 min; 19.6 µmol m−2 s−1 UV-A) and release Fe2+. Using a coculture setup with Leptolyngbya and Synechocystis sp. PCC 6803 (a non-siderophore producer) in membrane-separated compartments and alginate-embedded FeCl3 to simulate poorly accessible precipitated iron, we demonstrate cyanochelin B mode of actions. Our results show that in the absence of UV light, cyanochelin B efficiently monopolizes iron, favoring Leptolyngbya. However, UV light eliminates this monopolization, making iron available to any cohabiting, also possibly competing, organisms. We further report isolating novel cyanochelin B-producing Phormidesmis strains from field material and discuss the broader implications of photolytic siderophores. In conclusion, our interdisciplinary approach led to the discovery of a novel photolytic siderophore, cyanochelin B, and highlighted its possible role in distributing iron in microbial communities.