The environmental drivers contributing to cyanobacterial dominance in aquatic systems have been extensively studied. However, understanding of toxic vs. non-toxic cyanobacterial population dynamics and the mechanisms regulating cyanotoxin production remain elusive, both physiologically and ecologically. One reason is the disconnect between laboratory and field-based studies. Here, we combined 3 years of temporal data, including microcystin (MC) concentrations, 16 years of long-term ecological research, and 10 years of molecular data to investigate the potential factors leading to the selection of toxic Microcystis and MC production. Our analysis revealed that nitrogen (N) speciation and inorganic carbon (C) availability might be important drivers of Microcystis population dynamics and that an imbalance in cellular C: N ratios may trigger MC production. More specifically, precipitous declines in ammonium concentrations lead to a transitional period of N stress, even in the presence of high nitrate concentrations, that we call the “toxic phase.” Following the toxic phase, temperature and cyanobacterial abundance remained elevated but MC concentrations drastically declined. Increases in ammonium due to lake turnover may have led to down regulation of MC synthesis or a shift in the community from toxic to non-toxic species. While total phosphorus (P) to total N ratios were relatively low over the time-series, MC concentrations were highest when total N to total P ratios were also highest. Similarly, high C: N ratios were also strongly correlated to the toxic phase. We propose a metabolic model that corroborates molecular studies and reflects our ecological observations that C and N metabolism may regulate MC production physiologically and ecologically. In particular, we hypothesize that an imbalance between 2-oxoglutarate and ammonium in the cell regulates MC synthesis in the environment.