Cyanobacteria from Subsection V (Stigonematales) are important components of microbial mats in non-acidic terrestrial hot springs. Despite their diazotrophic nature (N2 fixers), their impact on the nitrogen cycle in such extreme ecosystems remains unknown. Here, we surveyed the identity and activity of diazotrophic cyanobacteria in the neutral hot spring of Porcelana (Northern Patagonia, Chile) during 2009 and 2011–2013. We used 16S rRNA and the nifH gene to analyze the distribution and diversity of diazotrophic cyanobacteria. Our results demonstrate the dominance of the heterocystous genus Mastigocladus (Stigonematales) along the entire temperature gradient of the hot spring (69–38 °C). In situ nitrogenase activity (acetylene reduction), nitrogen fixation rates (cellular uptake of 15N2) and nifH transcription levels in the microbial mats showed that nitrogen fixation and nifH mRNA expression were light-dependent. Nitrogen fixation activities were detected at temperatures ranging from 58 °C to 46 °C, with maximum daily rates of 600 nmol C2H4 cm−2 per day and 94.1 nmol N cm−2 per day. These activity patterns strongly suggest a heterocystous cyanobacterial origin and reveal a correlation between nitrogenase activity and nifH gene expression during diurnal cycles in thermal microbial mats. N and C fixation in the mats contributed ~3 g N m−2 per year and 27 g C m−2 per year, suggesting that these vital demands are fully met by the diazotrophic and photoautotrophic capacities of the cyanobacteria in the Porcelana hot spring.