Light microscopy studies on new materials and museum collections of early Cambrian organic-walled microfossils, informally called acritarchs, provide the observations on phenetic features that permit a comparison to certain Modern microalgae and the recognition of various developmental stages in their life cycle. The microfossils derive from various depositional settings in Estonia, Australia, Greenland, Sweden, and Poland. The exceptionally preserved microfossils reveal the internal body within the vesicle, the endocyst, and the process of releasing the endocyst from the cyst. Vegetative cells, cysts, and endocysts are distinguished, and the hypothetical reconstruction of a complex life cycle with the alternation of sexual and asexual generations is proposed. Acritarchs from the Skiagia-plexus are cysts, and likely zygotes in the sexual generation, which periodically rested as “benthic plankton.” Some microfossils of the Leiosphaeridia-plexus that are inferred to be vegetative cells were planktonic and probably haplobiontic. These form-taxa may belong to a single biological species, or a few closely related species, and represent the developmental stages and alternating generations in a complex life cycle that is expressed by polymorphic, sphaero- and acanthomorphic acritarchs. The morphological resemblance and diagnostic cell wall ultrastructure with the trilaminar sheath structure known from earlier studies suggest that the early Cambrian microfossils are the ancestral representatives and/or early lineages to the Modern class Chlorophyceae and the orders Volvocales and Chlorococcales.