Thermophilic cyanobacteria are a low-carbon environmental resource with high potential thanks to their innate temperature tolerance and thermostable pigment, phycocyanin, which enhances light utilisation efficiency and generates a high-value product. However, large-scale cultivation and harvesting have always been bottlenecks in unicellular cyanobacteria cultivation due to their micrometric size. In this study, a 40-litre inner-light photobioreactor (PBR) was designed for scaled-up cultivation of Thermosynechococcus elongatus E542. By analysing light transmission and attenuation in the PBR and describing it via mathematical models, the supply of light energy to the reactor was optimised. It was found that the hyperbolic model describes the light attenuation characteristics of the cyanobacterial culture more accurately than the Lambert–Beer model. The internal illumination mode was applied for strain cultivation and showed a two-fold better growth rate and four-fold higher biomass concentration than the same strain grown in an externally illuminated photobioreactor. Finally, the downstream harvesting process was explored. A mixture of chitosan solutions was used as a flocculant to facilitate biomass collection. The effect of the following parameters on biomass harvesting was analysed: solution concentration, flocculation time and flocculant concentration. The analysis revealed that a 4 mg L−1 chitosan solution is optimal for harvesting the strain. The proposed solutions can improve large-scale cyanobacterial biomass cultivation and processing.