Many bacterial genes and virulence factors are regulated by interbacterial and/or host-parasite chemical signals. We demonstrate that toxin production by a free-living freshwater cyanobacterium is regulated in part by the presence of extracellular products of a eukaryotic green alga. In growth experiments, extracellular products made by the cyanobacterium Anabaena flos-aquae contained both anatoxin and microcystin, and significantly reduced the yield of Chlamydomonas reinhardtii, a green alga. Based on experiments in which we added purified toxins to C. reinhardtii cultures, we believe that microcystin was responsible for the growth reduction. A. flos-aquae produced anatoxin constitutively when grown alone, but anatoxin concentration increased in the presence of C. reinhardtii elicitors. Microcystin accumulation depended on the growth phase; however, high concentrations of C. reinhardtii extracellular products completely inhibited microcystin accumulation. Our results demonstrate that cyanobacterial toxin production may be regulated by complex growth phase-dependent and environmental chemical cues, and suggest that secreted chemicals can mediate the outcome of competition between the cyanobacterium A. flos-aquae and the green alga C. reinhardtii.