Go night fishing, and you might see a greenish/bluish light under the water. You're probably seeing a microscopic, single-celled organism called Noctiluca, Latin for “night light.” This beautiful phenomenon – an intense and somewhat eerie, greenish-white flash – is most noticeable in the sea on dark, moonless nights. Old-time commercial fishermen referred to it as “fire in the water.”

Noctilucae belong to a group of plants known as dinoflagellates, unique living organisms that have characteristics of both plants and animals. Noctilucae produce tiny pinpoints of light when disturbed. En masse, they create instantaneous but short bursts of light. On noctilucae nights, the greenish-white light of these free-floaters is visible in the bow spray and wake of boats, in your footprints as you walk along the water’s edge – even on small mole crabs awash by noctilucae carried in on the waves.

The mechanisms behind bioluminescence are not completely understood; however, scientists do know that a chemical process takes place and light is a byproduct. Luciferin and luciferase are the chemicals involved. Other marine animals that exhibit bioluminescence include certain types of worms, comb jellies, squid, mollusks, crustaceans and fishes. Some fishes and squid can also produce light from bacteria living in their light organs.

Scientists have long studied the purpose for bioluminescence. Deep-water animals like squid and fishes may use their light capabilities to communicate, attract food, as a defense, attract a mate, or for all these reasons.

 ... from "Ask the Aquarium"