<p>Biocrusts are essential for arid ecosystem recovery, but their potential for restoring degraded coal mine soils is limited by undefined microbial inoculation thresholds and unoptimized multi-organism synergies. To address this challenge, orthogonal experiments were conducted to evaluate the effects of soil substrate, algal/bacterial inoculations (Chlorella and Actinomyces) and biocrust particle size on biocrust propagation. Principal component analysis (PCA) was used to identify optimal propagation conditions, followed by quantification of microbial functional gene abundance related to carbon and nitrogen fixation. The study found that both substrate type and biocrust size had a significant impact on biocrust growth indicators. Substrate type also increased soil nutrients, peroxidase (POD), chlorophyll-a, and soluble protein contents. The optimal conditions for biocrust propagation included using mixed soil substrate, adding Actinomycetes at 1&#xa0;g/kg, spreading Chlorella at 1&#xa0;g/m², and having a biocrust size of 20 mesh. Using 1&#xa0;g/kg of Actinomycete inoculum led to significant community recombination. The mixed soil substrate enhanced soil biodiversity and richness. The T7 group exhibited the highest levels of carbohydrate metabolism, energy metabolism, and overview pathways. Additionally, carbon fixation genes (<i>rbcl</i>,<i> korA</i>,<i> aclB</i>,<i> acsA</i>, and <i>acsB</i>) and nitrogen fixation genes (<i>nifH</i>,<i> nifD</i>, and <i>nifK</i>) abundance was higher in T7 and T8. The results provide a potential approach for extensive propagation of biocrusts, demonstrating a positive synergistic interaction between Actinomycetes and Chlorella that enhance nitrogenase and microbial community function.</p>