Among green plants, desiccation tolerance is common in seeds and spores but rare in leaves and other vegetative green tissues. Over the last two decades, genes have been identified whose expression is induced by desiccation in diverse, desiccation-tolerant (DT) taxa, including, e.g., late embryogenesis abundant proteins (LEA) and reactive oxygen species scavengers. This up-regulation is observed in DT resurrection plants, mosses, and green algae most closely related to these Embryophytes. Here we test whether this same suite of protective genes is up-regulated during desiccation in even more distantly related DT green algae, and, importantly, whether that up-regulation is unique to DT algae or also occurs in a desiccation-intolerant relative. We used three closely related aquatic and desert-derived green microalgae in the family Scenedesmaceae and capitalized on extraordinary desiccation tolerance in two of the species, contrasting with desiccation intolerance in the third. We found that during desiccation, all three species increased expression of common protective genes. The feature distinguishing gene expression in DT algae, however, was extensive down-regulation of gene expression associated with diverse metabolic processes during the desiccation time course, suggesting a switch from active growth to energy-saving metabolism. This widespread downshift did not occur in the desiccation-intolerant taxon. These results show that desiccation-induced up-regulation of expression of protective genes may be necessary but is not sufficient to confer desiccation tolerance. The data also suggest that desiccation tolerance may require induced protective mechanisms operating in concert with massive down-regulation of gene expression controlling numerous other aspects of metabolism.