Phormidium sp. ETS-05 is one of the target cyanobacteria species conferring anti-inflammatory properties to the therapeutic muds applied by spas of the Euganean Thermal District (Italy) to treat arthro-rheumatic pathologies. Beneficial mud is prepared by spas following a traditional method, called maturation, leading to the growth of a specific microbiota on natural raw clay irrigated by flowing thermal water at 37–47 °C for about two months. The effectiveness of the mud is related to heat, electrolytes and bioactive molecules synthesized by the microbiota. A clear role in the anti-inflammatory activity of muds has been demonstrated for the exopolysaccharides, EPS, produced by the entire microbiota and Phormidium sp. ETS-05. Considering the interest in this species, we assessed its optimal growth conditions to obtain the higher EPS production in relation to temperature, light spectra, and intensity and nitrogen availability. The production of biomass and pigments was also taken into account, as other high-value compounds can be obtained in parallel with EPS. We found that exposure to a temperature of 45 °C under white light at 100 µmol photons m⁻² s⁻¹ is optimal to reach the highest biomass (1.13 g L⁻¹) and an average production of 75 mg g_DW⁻¹ phycocyanin and of 150 mg g_DW⁻¹ EPS for Phormidium sp. ETS-05 cultured in lab-scale photobioreactors for 9 days. Putative genes linked with EPS assembly and export have also been identified in its genome, some of which have been investigated for their expression levels, opening up the possibility of biotechnologically boost EPS production.