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Methanotroph-microalgae cocultures offer a promising bioprocess platform for methane (CH₄) and carbon dioxide (CO₂) valorisation and have been proposed for sustainable single-cell protein (SCP) production. In coculture, the thermoacidophilic methanotroph Methylacidiphilum sp. RTK17.1 can benefit from oxygen supplied by the extremophilic microalga Galdieria sp. RTK37.1 under low-O₂ conditions, enhancing growth and methane oxidation. However, oxygen availability is a critical factor that can rapidly become limiting and is dependent on the relative abundance of each coculture partner. Here, we investigated how the initial Methylacidiphilum:Galdieria biomass ratio influences coculture dynamics and overall carbon assimilation. At low initial ratios (< 0.18 gDW L⁻<sup>1</sup>: gDW L⁻<sup>1</sup>), CH₄-fed cocultures achieved 17-28% greater net carbon fixation than CH₄-free controls (p < 0.05), indicating effective methanotroph-microalgae synergy via oxygen exchange. In contrast, ratios ≥ 0.23 led to significant growth inhibition (66-100% reduction, p < 0.001) and reduced net carbon fixation (44-62% reduction, p < 0.001). These cocultures exhibited chlorosis and excreted coproporphyrin III, symptoms that were fully reversible upon oxygen replenishment. Collectively, these findings reveal that Galdieria sp. RTK37.1 requires a minimum oxygen threshold for photosystem pigment biosynthesis, while the high O₂ affinity of Methylacidiphilum sp. RTK17.1 can result in oxygen limitation at elevated methanotroph abundance. Consequently, interactions that are mutually beneficial at low methanotroph densities become inhibitory due to oxygen competition. This work highlights the central role of O₂ partitioning in extremophile cocultures and provides a mechanistic basis for optimising methane-fed photobioreactors relevant to SCP production and carbon valorisation.